Post Office Scheme : If you are currently thinking of investing and you are unable to find the right investment option, today we have come up with a great investment scheme for you. This scheme is Public Provident Fund (PPF) Scheme of Post Office. This post office scheme helps a lot in building huge funds in the long run.
The special feature of this scheme is that the investment in it is completely safe. It is not affected by market fluctuations. The interest rates here are fixed by the government. Currently, Post Office is getting 7.1 percent interest per annum on PPF scheme.
You can open a Public Provident Fund (PPF) account at a post office or bank branch. This account can be opened for just Rs.500. In this, an amount of up to Rs 1.50 lakh can be deposited per year. The maturity period of this account is 15 years. But after maturity you can extend it further by 5-5 years.
If you deposit Rs 12,500 per month in a PPF account and maintain it for 15 years, you will get a total of Rs 40.68 lakh on maturity. In this your total investment will be Rs 22.50 lakh, while your interest income will be Rs 18.18 lakh. This calculation has been done assuming an interest rate of 7.1 percent per annum for the next 15 years. The amount received on maturity may change if the interest rate changes.
If you want to become a millionaire from this scheme, you will have to extend the term twice for 5 years after 15 years. That means now your investment tenure will be 25 years. Thus after 25 years your total money will be Rs 1.03 crore. If your total investment during this period is Rs 37.50 lakh, you will get Rs 65.58 lakh as interest income. Note that if you want to increase PPF account, you have to apply one year before maturity.
The biggest advantage of PPF scheme is that it offers tax benefits under Section 80C of Income Tax. In this, the investment in the scheme up to Rs 1.5 lakh can be deducted. PPF interest and maturity amount is also tax free.
