Post office small savings is a better option for conservative investors. Being a government scheme, it guarantees your return on every penny.
PPF Calculator:
There are many investors who want to invest in those schemes in the market, where there is no risk at all. Returns can be high in equities, but there are also risks. In such a situation, small savings of the post office is a better option for conservative investors. Being a government scheme, it guarantees your return on every penny. There are savings schemes in the post office with maturity from 1 year to 15 years. If you have a long-term investment horizon, then you should invest in Public Provident Fund (PPF). The maturity of this scheme is 15 years, while interest is also getting better on it as compared to FD or RD.
Features of PPF Scheme
The interest on Public Provident Fund (PPF) is 7.1 percent per annum compounding. The maturity of this scheme is 15 years, but it can be extended for another 5 to 5 years even after maturity. If you do not need the fund at the maturity of 15 years, then you can carry it forward. This will give you more benefit of compounding. The maximum amount that can be deposited in this scheme is 1.50 lakh annually. Instead of depositing 1.50 lakh in a year, you can also take the option of depositing Rs 12500 every month. You can also take advantage of tax exemption from PPF account under 80C of the Income Tax Act. The interest and maturity income received in this is also tax free.
PPF calculator: 18 lakh interest on 22.5 lakh deposits
- Maturity: 15 years
- Monthly investment: Rs 12,500
- Investment in a year: Rs 1.50 lakh
- Total investment in 15 years: Rs 22.50 lakh
- Annual interest rate: 7.1 percent
- Maturity Amount: Rs 40.70 lakh
- Interest Benefit: Rs 18.20 lakh
PPF Calculator: To become a millionaire
The advantage of PPF is that even after maturity, this scheme can be extended for 5 years for 5 years. Based on the current interest rates, if you want to make a corpus of 1 crore from this scheme, then it will have to be extended for 2 times 5 years after maturity.
- Monthly investment: Rs 12,500
- Total investment in a year: Rs 1.50 lakh
- Total investment in 25 years: Rs 37.50 lakh
- Annual interest rate: 7.1 percent
- Maturity Amount: Rs 1.03 crore
- Interest Benefit: Rs 62.50 lakh
