Home >Money >Personal Finance >Should I start investing in PPF at a young age?

I am 27 years old. I work with a brokerage house as an analyst. Till now, I have invested in direct stocks and equity mutual funds. Now, I also want to add some debt investment to my portfolio to make it a comprehensive one. Is investing in Public Provident Fund (PPF) a good idea at this young age. I do not have any problem with the long maturity term of PPF. Is it a very conservative investment for me at this young age? Also, if I invest in PPF now, it will mature much ahead of my retirement age. What do you recommend? Should I invest in PPF now or delay my investment decision by a few yea?

-Shiv Raj

By Prableen Bajpai, founder & managing partner, Finfix Research & Analytics

PPF or Public Provident Fund is a very good product for the long-term fixed income part of your portfolio. You should open a PPF account and invest regularly. At the time of maturity, opt for an extension. Each extension is for five years, which means that if you extend it twice it will finally mature after 25 years. You will be 52 by then, which will be closer to your retirement. In addition, allocate some portion towards building a debt portfolio for near- to medium-term goals so that your long-term investments are left untouched in case of any requirement of funds. Do create a contingency fund with minimum six months of monthly expenses (including EMIs and monthly investments).

(Views are as expressed by the expert.)

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