SBI PPF Scheme: The State Bank of India’s Public Provident Fund (PPF) scheme has long been considered a strong, safe investment option. This scheme is ideal for those who want to build a large corpus while remaining risk-averse. PPF was launched in 1968 by the Finance Ministry of the Government of India to provide citizens with tax savings and stable returns.

PPF Account Tenure and Extension Rules

PPF accounts are opened for a period of 15 years. Upon completion of this period, investors can extend the account in blocks of 5 years, repeating this process multiple times. This means that by continuing to invest until retirement, a large tax-free corpus can be built.

How much to invest in PPF

A minimum of 500 rupees and a maximum of 1.5 lakh rupees can be deposited into a PPF account every year. It is mandatory to invest at least once a year; a penalty may apply. The investment amount can be deposited in one go or in installments.

The Math of Investing Rs. 1 Lakh Annually in SBI PPF

PPF currently offers an interest rate of 7.1 percent per annum, which is compounded based on compounding. If an investor deposits Rs. 1 lakh annually in PPF, their total investment will be Rs. 15 lakh in 15 years. At the end of this period, they can receive a maturity amount of approximately Rs. 27.12 lakh. This means that over Rs. 12 lakh is accumulated solely in the form of interest, which is completely tax-free.

Why Choose PPF for Retirement Planning

PPF is ideal for investors who want to build a fund without risk over the long term. Market fluctuations do not affect this scheme. Due to the government guarantee, the capital remains safe, and the interest rate is also fixed by the government from time to time.

How to Open an SBI PPF Account Using the YONO App

SBI has digitalized the process of opening a PPF account. A new PPF account can be opened from the comfort of your home in minutes using the YONO app. After logging in to the app, go to the investment section and select the option to open a PPF account. After entering the necessary information, nominee details, and selecting a branch, the account is immediately activated through OTP verification. Regular investments can then be made through net banking or mobile banking.

The most important tax-related feature of the PPF scheme

The PPF scheme falls under the EEE category. This means that the investment amount is tax-deductible, the interest is tax-free, and the entire maturity amount is tax-free. Under Section 80C of the Income Tax Act, investments up to ₹1.5 lakh per annum are eligible for tax exemption.

About the Author

Adarsh P

Adarsh Pal is a content writer at Timesbull Media. He specializes in writing news related to industry updates, the automotive sector, banking, telecommunications, the travel sector, and personal finance. Adarsh has previously worked with several digital media channels. He is skilled at presenting news accurately and disseminating information based on...

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