PPF Calculation: If you are looking for a great investment scheme, the government offers a scheme that provides risk-free returns. Investing in this scheme yields excellent returns with minimal investment. We are talking about the PPF scheme. PPF is considered a reliable investment option among small and medium investors in the country. People regularly save according to their income and build a strong fund for the future.
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The biggest advantage of the PPF scheme is that the investment is completely safe and provides guaranteed returns. A PPF account has a tenure of 15 years, and the investment made during this period is eligible for tax exemption. Tax benefits are available on investments up to a maximum of Rs 1.50 lakh in a financial year. Furthermore, the entire amount received at maturity is also tax-free.
Build a fund of millions with just this much investment
If your goal is to build a fund of approximately Rs 25 lakh through PPF, you will need to invest a fixed amount every month. Currently, PPF offers an annual interest rate of 7.1%. Based on this interest rate, if you deposit approximately Rs 7,750 every month, your goal can be achieved in 15 years. In this way, your total investment in a year will be approximately Rs 93,000. Over 15 years, you will deposit approximately Rs 13.95 lakh, and this amount can grow to approximately Rs 25.22 lakh at maturity. This means you will receive an interest benefit of approximately Rs 11.27 lakh.
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Know when interest is credited
The interest earned in PPF is compounded annually, which leads to rapid growth of the investment amount over the long term. However, the interest is calculated on the minimum balance available between the 5th and the last day of the month. Therefore, to get better returns, it is advised to deposit the money before the 5th of every month. The effect of compounding is even more pronounced with regular investments over a long period. These facilities are available in PPF:
PPF is considered an excellent investment option because it is risk-free, offers guaranteed returns, and provides significant tax savings. This scheme helps in building a strong foundation for retirement planning, children’s education, or future financial security. Moreover, it is not affected by market fluctuations.