PPF Savings Duration: You have just got a job but are not able to save money for your hobbies. Are you planning to save some part of your salary from the beginning of the new year? If yes, you should know about a very easy investment option. This report explains how to save money through PPF (Public Provident Fund).
This investment has no risk like mutual funds or stocks. Instead, it gives guaranteed returns. This is why many people trust this scheme.
What is PPF?
PPF, or Public Provident Fund, is a tax-free savings scheme by the central government. The interest is calculated using compound interest. You can open a PPF account with just ₹500. If someone deposits ₹500 in a year, the account will remain active. The maximum investment allowed in a financial year is ₹1.5 lakh.
PPF Savings Duration
PPF is a government savings scheme that helps you save money and earn good interest. You can keep your money in this scheme for 15 years. After 15 years, you can extend the account for another 5 years if you want.
How to Invest
You can deposit money in one go or in monthly installments. PPF is also a tax-saving scheme. If you deposit ₹1.5 lakh in a year, you will get tax benefits under Section 80C of the Indian Income Tax Act.
How to Withdraw Money
You can take a loan from your PPF account. After 7 years from the start of the account, you can withdraw a part of your money. The full account matures in 15 years, after which you can withdraw the entire amount.
Who Can Open a PPF Account
Any Indian citizen can open a PPF account. Even minors under 18 can have a PPF account, but it must be opened by their guardians.
Interest Rate
The government sets the PPF interest rate every three months. For the financial year 2024-25, the rate is 7.1% per year. Interest is calculated on a compound basis.
How to Open a PPF Account
You can open a PPF account with banks like SBI, HDFC, ICICI, or BOB from home.
Steps to open online:
- Log in to your net banking account.
- Go to “PPF Account” under ‘Investments’ or ‘Services’.
- Fill in the required details.
- Upload Aadhaar card and PAN card copies.
- Deposit a minimum of ₹500.
- Download the confirmation slip. Your account will be opened.
How Interest is Calculated
If you invest ₹2,000 per month, you will invest ₹24,000 per year. In 15 years, the total investment will be ₹3.6 lakh. At an interest rate of 7.1%, you will earn approximately ₹2.9 lakh in interest. The total amount at the end of 15 years will be ₹6.5 lakh.