Small Saving cheme: PPF i.e. Public Provident Fund is a small saving scheme. The government decides its interest rate every 3 months. At present, PPF is giving 7.1 percent compound interest annually.
You can invest a minimum of Rs 500 and a maximum of Rs 1,50,000 in PPF in a financial year. This amount can be invested in lump sum or installments.
Loan facility is also available in PPF. Only one loan can be taken in a financial year. If the loan is repaid within 36 months, the interest rate is 1 percent per annum. On repayment after 36 months, this rate is 6% per annum.
PPF account matures in 15 years. You can keep the maturity payment in PPF account even without deposit. You will continue to get PPF interest on this.
Investors can also extend their PPF account for the next 5 years and more. During this period, you can also make one withdrawal every financial year.
If you invest ₹ 12,500 every month i.e. Rs 1.5 lakh in a year in PPF, then in 20 years a fund of Rs 66,58,288 will be accumulated.
Your investment in this fund of Rs 66.5 lakh will be Rs 30 lakh and interest income will be Rs 36.5 lakh.
