A PPF account can make any investor a millionaire in 25 years, and with the help of a PPF account, ₹2.27 crores can be collected in 35 years, but today we are telling you that with a PPF account, you can also get a regular pension of ₹60989 per month after retirement. So read on and know how…
Public Provident Fund, or Public Provident Fund or PPF – every employed person must have heard this name at some time or the other, and many people must have opened an account under this scheme. PPF is the most popular scheme among the small savings schemes run by the Central Government to provide an opportunity to save for a secure future and earn tax-free interest, and if invested in a disciplined manner, it can definitely make you a millionaire on retirement. NDTV readers / users have already been informed that with the help of a PPF account, ₹ 2.27 crores can be collected in 35 years, and a PPF account makes any investor a millionaire in 25 years, but today we will tell you that with a PPF account you can also get a regular pension of ₹ 60989 per month after retirement. So keep reading, and know how…
There is no tax on the EEE category scheme PPF.
First of all, it would be good to know the important and beneficial things about PPF, so, first of all remember that the amount deposited in the PPF account every year is exempted from income tax, the interest you get every year in this account is also not taxable, and the entire amount received at the time of maturity is also not subject to income tax.
Where and how to open a PPF account…?
Any Indian can open an account in the very popular savings scheme PPF by going to any post office or any branch of any bank, in which the account holder has to deposit a minimum of ₹500 and a maximum of ₹1,50,000 during every financial year (1 April to 31 March).
How PPF account will make you a crorepati in 25 years…
Now let us tell you how to arrange pension of about ₹61000 per month on retirement. If you are 35 years old, and you open a PPF account at the beginning of this financial year and deposit ₹1,50,000, then on 31st March next year, ₹10,650 will be added to your PPF account as interest, because at present the Narendra Modi government at the center is paying interest at the rate of 7.1 percent on the amount invested in PPF. Due to this interest, on the very first day of the next financial year, i.e. on 1st April, 2025, a balance of ₹1,60,650 will be visible in your PPF account, which will become ₹3,10,650 if you deposit ₹1,50,000 before 5th April in the new financial year. After this, on March 31, 2026, the interest at the same rate will be ₹22,056, and the balance will become ₹3,32,706. Now you, i.e. the PPF investor, have to deposit ₹1,50,000 in your PPF account every year between 1 and 5 April. In this way, with the help of disciplined investment, at the time of maturity, i.e. after 15 years, you will see ₹40,68,209 in your PPF account, out of which ₹18,18,209 will be the interest amount, and your original investment would have been ₹22,50,000.
If you opened a PPF account at the age of 35, then at the time of this maturity you will be 50 years old, but there are still 10 years left for retirement. According to the rules related to PPF account, you can extend your PPF account in blocks of 5 years by applying before maturity. The extension of five years each can be availed unlimited number of times. Now at the age of 50, you extend your account, and maintain the annual routine of investment. Now your PPF account will be on the verge of maturity when you will be 55 years old. At that time, ₹66,58,288 will be visible as deposit in the PPF account, in which ₹36,58,288 will be as interest, and your investment will be ₹30,00,000.
Now extend the PPF account once again, and keep investing every year as before, because your journey of becoming a millionaire and earning a monthly pension of ₹61000 will start now. This time after five years, when your PPF account matures, you will be 60 years old, and the total amount in your account will have crossed the figure of one crore. At that time, a total of ₹1,03,08,014 will be deposited in your PPF account, in which your investment would have been ₹37,50,000 and the government has added ₹65,58,015 to your account as interest till now.
How will a monthly pension of ₹60989 be arranged from a PPF account…?
Now read another rule related to the extension of the PPF account. Whenever you extend the PPF account, you have two options. One – the investment will be continued after extension. Two – Investment will not be made after extension. Till now you have extended your account twice, but did not stop investing, so the amount kept growing very fast. But now after retirement, investing will not be easy and convenient, so now the time has come to get pension without making new investments.
Without making any new investment in PPF account, you will get interest of ₹7,31,869…
So, now you will not make any new investment this year, but will continue the account. So, this time the accumulated deposit will also remain ₹1,03,08,014, and at the end of the year, you will get interest of ₹7,31,869. Here we are assuming that the interest rate which is there today will remain the same.
Now know another rule about withdrawal of money from PPF account. When you choose the option of extending the PPF account without investing, then you get the right to withdraw money once in a financial year. All you have to do is that you withdraw only the interest amount every year, that is, now you withdraw only this year’s interest amount of ₹7,31,869 from your PPF account, and deposit it in your savings account. This is your pension amount, if you divide it in 12 months, you can spend ₹60989 every month.
Another interesting fact worth remembering is that despite this withdrawal, your accumulated amount in the PPF account will remain ₹1,03,08,014, and next year you will be able to withdraw the interest earned on it, ₹7,31,869. The most beneficial information in this withdrawal is that the interest amount withdrawn every year will be completely tax free, meaning you will never have to pay income tax on this amount.
It is important to remember some important things about PPF account…
The interest rate on PPF account is decided by the Central Government every quarter, so, in case of increase or decrease in interest rate, the amount received on retirement can also increase or decrease.
PPF will be most beneficial for the investor if he invests in the first five days of April, so that maximum interest can be obtained.
Remember, the maturity amount mentioned in this news has been achieved by running the PPF account continuously for 25 years, so if the initial age of the investor is more than 35 years, or he does not extend the PPF account at least twice after the first routine maturity of 15 years, then the maturity amount may be less.
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