Public Provident Fund: The Public Provident Fund (PPF) is one of the most popular and reliable investment schemes in the country, backed by a government guarantee. The 7.1 percent interest rate, tax-free interest, and maturity amount make it a preferred choice for those seeking risk-averse investments. The scheme has a lock-in period of 15 years, which can be extended in blocks of five years after completion. Tax deductions of up to ₹1.50 lakh are also available under Section 80C of the Income Tax Act. This makes it an excellent option for building a stable and large corpus for the future.
Who can open a PPF account?
Any resident of India, whether employed, businessperson, self-employed, or pensioner, can open a PPF account. An account can also be opened in the name of a minor child, who is supervised by a parent or legal guardian. However, NRIs cannot open a new account under this scheme. An account can be opened with a minimum of ₹500, and a maximum of ₹1.50 lakh can be deposited annually.
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Deposit and Withdrawal Rules
PPF is a strictly long-term investment scheme, with a mandatory lock-in period of 15 years. If needed, withdrawals of up to 50 percent of the account balance are permitted from the end of the fourth financial year. There is an option to close the account after the 15-year term or continue in five-year blocks. This makes the scheme a secure financial instrument for life.
How much return will you receive in 18 years?
It offers an annual interest rate of 7.1%. Small monthly investments can create a substantial corpus. A monthly deposit of ₹5,000 will result in a total investment of ₹10,80,000 over 18 years. The total interest earned on this scheme will be approximately ₹11,25,878, and the maturity amount will be approximately ₹22,05,878.
If a monthly investment of ₹7,000 is made, the total investment will amount to ₹15,12,000 over 18 years. This will generate interest of approximately ₹15,76,230, resulting in a total corpus of approximately ₹30,88,230.
Investing ₹10,000 per month will result in a total investment of ₹21,60,000. Interest will be approximately ₹22,51,757, resulting in a corpus of approximately ₹44,11,757 after 18 years.
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PPF is the best long-term investment
This scheme is safe, government-backed, and offers completely tax-free returns. Long-term compound interest multiplies the investment, making it a reliable option for retirement planning, children’s education, or future financial security.