PPF Investment: The lock in period or maturity period on PPF account is 15 years. But, even after this you can continue your investment. This means that you get this facility in PPF that you can extend it for 5 years.
PPF Investment: Anyone from a child to an elderly person can invest in the Public Provident Fund scheme. The biggest advantage of this investment with a lock-in period of 15 years is that it gives more interest than other investments. You get an annual interest of 7.1%, which is more than a bank fixed deposit. Investing just Rs 1,000 per month in the scheme can give you around Rs 3.21 lakh in 15 years.
How much money will an investment of ₹3000 give?
Investment in PPF can start from Rs 500. If you deposit only Rs 500 every month, then after 15 years you will have a fund of about Rs 1.6 lakh. At the same time, by investing Rs 2 thousand every month, a fund of about Rs 6.43 lakh can be prepared in 15 years. If you invest Rs 3 thousand, then you can get Rs 9.64 lakh. Let us tell you, the maximum investment limit in a financial year is Rs 1.5 lakh.
| Monthly Investment | How much will you get after 15 years | How much will you get after 20 years |
| 500 rupees | Rs 1.6 lakh | Rs 2.65 lakh |
| 1 thousand rupees | Rs 3.21 lakh | Rs 5.30 lakh |
| 2 thousand rupees | Rs 6.43 lakh | Rs 10.60 lakh |
| 3 thousand rupees | Rs 9.64 lakh | Rs 15.91 lakh |
Note: The calculation is based on rough estimates at the current interest rate. The interest rate on PPF is reviewed every 3 months.
Where should one open a PPF account?
You can open a PPF account in any post office branch or bank branch. Apart from your name, you can also open it in the name of children in case of minors. But, you will manage the account as a caretaker until they turn 18. According to the rules, a PPF account cannot be opened in the name of a Hindu Undivided Family (HUF).
Investment can be increased by 5-5 years
The lock in period or maturity period of 15 years on a PPF account is 15 years. But, even after this you can continue your investment. This means that you get this facility in PPF that you can extend it for 5 years. You can keep the maturity amount for a total of 20 years. Investment can also be done during this period. However, 1 year before the completion of the maturity period, you will have to give an application that you want its extension. Even after the completion of 20 years, it can be extended again for 5 years.
Take care of the lock in period
The lock in period for pre-withdrawal in PPF account is 5 years. This means that money cannot be withdrawn from this account for 5 years after the year of opening the account. After this period is over, pre-withdrawal can be done by filling Form 2. However, maturity withdrawal cannot be done before 15 years.
EEE tax exemption is available
PPF comes under the EEE category of tax. This means that the entire investment made in the scheme will get the benefit of tax exemption. Apart from this, the interest received on that investment and the entire amount received on maturity is also tax free. Therefore, according to long term benefits, PPF investment is counted as a good option.
PPF account cannot be seized even on the order of the court
PPF account cannot be seized on any court order at the time of debt or other liability. In this case also this scheme is good and useful.
You can get cheap loan by investing in PPF
You can also get cheap loan on the amount deposited in PPF account. But, there is a condition for this. You are entitled to take loan from PPF during the period of five years from the next year except the financial year in which the account is opened. If you have opened a PPF account in January 2017, then you can take loan from 1 April 2018 to 31 March 2022. You can get a maximum loan of 25% on the deposit.
