# PPF account, the must have for every investor

Public provident fund is one of the best investment tools that provides safety, compounding and tax benefits in one package. This should be the first investment that one gets into immediately after turning 18. The account is meant for a period of 15 years but can be extended by 5 years @ tenure expiry.

The safety of government assurance and the compounding effect will definitely take care of your retirement needs. You can invest up to 12 installments a year and up to 1 lakh in this account every year. You should try to invest the maximum amount possible in PPF account every year.

The following articles provide a great insight into " why investing in PPF is a must?"

20 must knows about PPF

6 great reasons to open a PPF account

PPF account can be opened at SBI bank branches or at your nearest post office. Selected ICICI bank brnaches also provide PPF account facility.

Quick guide to open PPF account

If you are looking for comparing PPF with EPF and NPS, here's another  write-up.

Squeeze the salaried class

This is one more step in 'extracting' more from the salaried class.

http://economictimes.indiatimes.com/personal-finance/savings-centre/savings-news/trouble-ahead-i-t-dept-tells-epfo-to-tax-premature-pf-withdrawals/articleshow/7822221.cms

Info on EPFO

ET carries an article today about provision of monthly slips with PF balances to contributors every month from EPFO ( Employees provident fund office). This seems to be the step in right direction. As of now, things like transfer, withdrawal, inquiry are not as transparent or as swift as they should be.

Whenever I have tried to transfer my PF ( when I have changed employers), I have really had a tough time. When a query is made to the PF offices concerned ( From and To PF offices), both of them point to each other or they say that they haven't received the form yet. This in spite of the fact my employer assuring that the form has been sent.

( You can use this link to register your EPF grievance)

Such loopholes and lack of transparency with one's money is definitely painful. They should try to emulate the NPS website  in terms of providing all information to subscribers online.

Now when the new government employees pension funds are managed by NPS ( Funds managed by six private funds), the EPF funds of private employees is managed by EPFO ( government organization).

In the long run, these organizations / schemes should be clubbed together for efficiency and everyone should have an unique identifier to manage his pension funds ( PRAN Number probably or UID
), irrespective of where he works and change of employment.

We have a long way to go!

Here's the link of the ET article mentioned above.

EPF - Employee Provident Fund - A potential saving channel

EPF is one of the potential saving channel for those working in organized private sector. Employee provident fund consists of both the employee's and employer's contribution every month.

Everyone must keep track of their PF contributions regularly. Especially when there is a change in employment one must initiate the transfer of EPF from old account to the new one.

The return provided by EPF over the past few years has been 8.5%. For the year 2010-11, the EPF organization has decided an interest rate of 9.5%.

EPF rate still @ 8.5% (2009-10)

EPFO has maintained the interest rate for 2009-10 on EPF funds at 8.5%. ( EPF- Employee Provident Fund - normal 12% deducted from basic + 12% employers contribution)

If you are a person who looks at stocks as very volatile and are looking for good fixed income returns, increase your EPF contribution ( Voluntary contribution which most of the employers allow). This would ensure that your money earns a tax free return of 8.5%. With the declining Fixed deposit rates , this seems to be a good option. Fixed deposit returns have almost come down below 8% (with a slightly downward potential). Again , your Fixed deposit interest is not tax free. PPF with 8% tax free return would be the next best option to consider for , if you are not keen /able to increase your EPF contribution. Both of these investments (EPF/PPF) can get you deductions under 80C ( upto 1 lakh) and generate a handsome tax free return.