Post Office PPF Scheme: The Public Provident Fund (PPF) scheme, operated by the central government, is one of the most popular and reliable savings schemes in the country. This scheme is especially beneficial for those who want to make safe investments for the long term and also save on taxes. PPF investments earn an annual interest of 7.1%, which helps your money grow over time.
The biggest advantage of PPF is that it doesn’t require a large sum of money to invest. You can deposit a minimum of ₹500 and a maximum of ₹1.5 lakh annually in this scheme. You can deposit the entire year’s investment at once or in 12 instalments.
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Minimum investment amount in a PPF account
A PPF account can be easily opened at any post office or bank. It is mandatory to deposit at least ₹500 annually. If you want to invest regularly every month, this is the best option for you, as even small amounts can help you achieve a significant savings goal. Let’s say you deposit ₹7000 every month into your PPF account; your annual investment will be ₹84,000.
How does your investment grow in 15 years?
The PPF account has a tenure of 15 years, after which it matures. If you deposit ₹7000 every month, your total deposit in 15 years will be ₹12,60,000. With an annual interest rate of 7.1%, you will receive a total of ₹22,78,197 on maturity. This amount includes your principal investment of ₹12,60,000 and interest of ₹10,18,197. Thus, PPF not only increases your savings but also provides financial security in the long run.
Loan Facility in PPF Account
Another major feature of the PPF account is that it offers a loan facility. If you suddenly face a financial emergency, you can take a loan from your PPF account to manage the situation. However, certain rules must be followed to avail of the loan.
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The most important condition for a PPF account is that you must deposit at least ₹500 every year. If you fail to deposit the minimum amount in any given year, your account may be closed. However, it is possible to reactivate it. You can reactivate your account by paying a penalty.
Withdrawal Conditions from PPF
You cannot withdraw the amount deposited in your PPF account for the first 5 years after opening the account. This is a security measure to ensure that your long-term savings are not affected. Even after 5 years, withdrawals are possible only under certain special circumstances, such as serious illness, children’s education, or any other important reason.