Banking is the sector which
has benefited the most on account of advancement in information
technology. Today, though the number of
transactions with bank has increased, one hardly visits the bank’s branch. Most of the things are done at a click of the
mouse or through ATM.
Technology has changed the
way we make payments with electronic payment mode preferred by
customers nowadays. Electronic payment
mode via National Electronic Funds Transfer or NEFT as it is popularly known can be used to make payment to Public Provident Fund (PPF).
Using NEFT to invest in PPF
We are used to investing in
PPFs by going to the bank or post office, filling up the challan and depositing
the cheque or cash as the case may be.
With the advent of NEFT, one can remit the money to PPF account at a
click of mouse. No more need to go to
bank branch. It is not necessary that one should have the savings / current and PPF account in the same
bank. One can transfer money even if
both the accounts are in different banks.
However, this facility can only be availed by those having PPF account
in bank and not in post office.
Personal Experience: 'SIP in PPF'
I am using this facility
for my PPF account in State Bank of India and I am sure similar facility should
be available for investors having PPF account in other banks. I use the NEFT facility provided by ICICI
bank, where my savings account is, to transfer money in SBI PPF account.
Last year, I invested a lump sum amount at the end of the year via NEFT.
This year to ensure that I invest regularly, I created standing
instructions to transfer a fixed amount every month at a fixed date to the PPF
account. In other words, I created
a SIP in PPF to ensure timely investment.
By providing standing instruction for the entire year, I have taken
care of my full year’s PPF investment in just few minutes and clicks!
In PPF, interest is calculated on
the lowest balance between the close of the fifth day and the end of the month. Hence my standing instructions are for
crediting the PPF account on the very first day of the month. One can opt for any date between 1st to 4th to
ensure maximum interest benefit.
This is a great way of
investment in PPF and sets oneself free from the hassle of remembering the amount and date of investment
in PPF account.
However, keep the following
important points in mind:
1. This
facility is available only for investors having PPF account in banks and not
for those having it in post office.
2. One can
make maximum 12 investments in PPF account in a financial year with an overall limit of
Rs. 1,00,000. Ensure that you do not
breach this.
3. It is advisable
to check the PPF account every month for the first couple of months to ensure
credit is happening properly.
How do you invest in PPF? Have you ever invested via NEFT
facility? What are your views on ‘SIP
in PPF’?
