My PPF account will complete 20 years in March. Can I leave this account as it is to earn interest every year or should I deposit cash for another 5 years? How many times can I withdraw from the PPF in the next 5 years? I am 60.
Ankur Choudhary Co-Founder and CIO, Goalwise
replies: You can keep the PPF account operative without making any fresh contributions and continue to earn tax-free interest. You can make only one withdrawal every financial year but there is no limit on the amount. If you choose to contribute for another 5 years, then you can still withdraw once every financial year but the sum of all withdrawals during the 5-year extension cannot exceed 60% of the balance at the start of the extension. If liquidity is not a concern, then you can continue your PPF account with contribution as it will be like a tax-free 5-year FD.

I am 42 and my husband is 45. Our 18-year-old son will be completing his degree in two years and then go abroad for his masters. We want to save for his higher education and his wedding in 7-8 years. How much should we invest and where if we have to save Rs 30 lakh for his education and Rs 50 lakh for his wedding?
Raj Khosla Founder and Managing Director,
replies: For the short-term goal of your son’s education, invest in instruments offering capital protection, fixed returns and liquidity. You and your husband must invest up to Rs 15 lakh in ultra short-term debt mutual funds like ICICI Prudential Short Term and Franklin India Ultra Short Bond Fund, while parking up to Rs 10 lakh in a mix of post office deposits, sweep-in FDs and bank FDs.

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For his marriage, invest Rs 24,000 every month via SIPs in a mix of large and multi-cap equity funds for 8 years. You can invest Rs 6,000 each in SBI Bluechip, Axis Bluechip, Kotak Standard Multi-Cap and DSP Equity Fund. Start an RD of Rs 10,000 for 5 years and renew annually thereafter. Start an SIP of Rs 5,000 in an ultra short-term debt fund to beat inflation and create additional corpus. Review portfolio annually and in case of a shortfall, opt for an education loan, personal loan or LAP to bridge the gap. For protection, you and your wife should opt for term plans of Rs 1 crore each.



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