There are many investment options available for people, but if you are looking for a scheme that is tax free, risk free and has high returns, then Public Provident Fund can be a better scheme.
There are many investment options available for people, from government schemes to stock market, in which you can earn lakhs of rupees by investing. However, if you want to earn good money on risk free and low investment, then there is a great government scheme for you. You can start investing in this scheme with Rs 500 and earn lakhs of rupees.
Public Provident Fund (PPF) scheme can prove to be right for safe and good returns. This scheme can be opened from Post Office to public sector banks. Currently 7.1 percent interest is being given under PPF. You can easily become a millionaire by investing just Rs 500 every month in this scheme.
Minimum investment amount
If you want to open an account under this scheme, you can start investing with at least Rs 500. You need to invest only Rs 500 during any financial year and the maximum you can invest is Rs 1.5 lakh. The maturity period under PPF account is 15 years and if you want, you can withdraw the entire money after maturity. However, if you do not need the money then you can extend it for another 5 years. To increase maturity, you will have to apply one year in advance.
Can’t withdraw money for 5 years
If you have started this account and want to withdraw money on emergency before five years, then the amount cannot be withdrawn because there is a lockin period of five years under this scheme. After completion of this period, you can withdraw money by filling Form 2. Whereas if money is withdrawn from this scheme before 15 years, 1 percent interest will be deducted.
This scheme comes under tax exemption
PPF scheme comes in the category of EEE. This means that you get the benefit of tax exemption on the entire investment made under the scheme. Besides, you also get the benefit of tax exemption on the interest received on maturity. Under PPF, annual tax exemption can be availed on investment of Rs 1.5 lakh under Section 80C of Income Tax.
Earning lakhs of rupees on investment of Rs 500
If someone invests Rs 500 every month under Public Provident Fund, then you will have to invest for 15 years. In this case, you will get Rs 1.63 lakh on maturity. Whereas a person investing Rs 1,000 every month will get Rs 3.25 lakh after 15 years.
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