Public Provident Fund (PPF) is a tried-and-tested investment option. It has never disappointed investors. Tax exemption on investment amount, tax-free return on maturity and the hand of the government are the main attractions of this scheme.
Public Provident Fund (PPF) account is a good way to save tax as well as save money. Also there is no risk in it. This is such a small savings scheme backed by the central government which can be very beneficial in the long term. At present the rate of interest on it is 7.1 percent. According to tax and investment experts, this is still enough to beat the rise in inflation during the investment period.
Extension feature
Experts say that the PPF account matures in 15 years, but even after that, it can be extended for 5-5 years many times. Those who want to save for their retirement corpus can use PPF account as a long term risk free investment option. If a person invests in PPF for a long time, he gets the benefit of compound interest during the investment tenure.
When to start investing
According to experts, PPF account can be used to deposit retirement funds but for this an application has to be made to the bank or post office to extend the PPF account for the next 5 years. The PPF account holder has to submit an application in the 15th year of account opening. This can be extended for 5 to 5 years at times. If a person opens a PPF account at the age of 30, then he can invest in it for 30 years by availing the 5-year extension feature.
How to get 1 crore rupees
If a person does not want to take risk then he should start investing in PPF as soon as possible. If a person starts investing in PPF at the age of 30 and invests Rs 9000 in it every month, then after the maturity of 15 years, his PPF balance will be Rs 2929111. The total amount invested in this will be Rs 16,20,000 while the interest will be Rs 13,09,111. If he avails the extension benefit and compounding benefit for the next 15 years, his PPF balance will reach Rs 1,11,24,656. The total amount invested in this will be Rs 32,40,000 while the interest will be Rs 78,84,656.
