PPF Scheme: Investors can start investing in PPF with just Rs 500, while a maximum investment of Rs 1.5 lakh can be made in a year. The maturity period in this scheme is 15 years and even after maturity, the investment can be carried forward for 5-5 years.
Everyone makes small savings out of their hard earned money in the hope that they will not face any kind of financial problem after retirement. However, to achieve this goal, there is a need to invest your savings in the right places. If you also want to collect big funds, then you can invest in PPF Scheme.
Safe investments and tax benefits
Investment in PPF Scheme is a profitable deal in the long term. In fact, along with tremendous interest, the government guarantees security on your deposit. The returns received by investing in it are absolutely tax free. The benefit of compound interest is also available in this scheme. Along with this, under Section 80C of Income Tax, you can avail tax exemption on investment in PPF.
You can invest this much every year
Investors can start investing in PPF with just Rs 500, while a maximum investment of Rs 1.5 lakh can be made in a year. The maturity period in this scheme is 15 years, that is, you can invest for this period, but if you want to continue the investment even after maturity, then in such a situation the PPF account can be extended for 5-5 years. Facility is also available. However, for this one has to apply one year before the completion of maturity.
So much profit on investment of Rs.5000/month
Now how can an investor accumulate a fund of Rs 42 lakh by saving just Rs 5000 every month? Before calculating this, know that interest at the rate of 7.1 percent is given on investment in this scheme. By depositing Rs 5000 per month, Rs 60,000 will be deposited in the PPF account in a year and in 15 years the total amount deposited will become Rs 9,00,000. According to the interest rate fixed on the amount deposited by you, the interest will be Rs 7,27,284, that is, your deposited fund till then will be Rs 16,27,284.
Now if you extend this fund for 5-5 years, then your total deposited fund will also increase accordingly. That is, if you extend it for 10 years i.e. after 25 years, the total fund including interest on the amount deposited by you will be around Rs 42 lakh. The interest income you will get in this 25 year period will be more than Rs 26,00,000.
Loan facility is also available in this scheme
In PPF Scheme, you get the facility to invest in lump sum or in installments. Talking about its other benefits, emergency fund withdrawal can also be done through this scheme with maturity of one year, although investors cannot withdraw more than 50 percent of the amount. According to the condition laid down for this, the investment period should have been completed for 6 years. You can also take a loan under this only after investing for 3 years.
Account can be opened in post office or bank
You can open PPF account in almost all government and private banks of the country including post office. For this it is necessary to be an Indian citizen. You can open a PPF account in the name of minor children, but for this it is mandatory to have a guardian. Earnings from the child’s account are added to the parent’s income.
