Post Office Small Savings Schemes are a safe and reliable investment option for Indian citizens. If you want to avoid risky investments like the stock market or mutual funds, then these government-backed schemes of the post office are best for you. Your money is safe in these schemes, and a fixed return is also guaranteed. One such great scheme is the Public Provident Fund (PPF). If you invest ₹ 8,000 every month in this scheme, then in 20 years you can create a large fund of ₹ 42 lakh. Let us know everything related to this scheme in detail.
An investment with safe and fixed returns
The Public Provident Fund (PPF) is a scheme run by the Government of India. Its main objective is to encourage common people to save for the long term. Since it is a government scheme, the money invested in it is completely safe, and you get guaranteed returns. Even the interest received on your investment is tax-free.
Current interest rate and its calculation
The government fixes the interest rate of PPF every three months. Right now, this scheme is getting 7.1% annual compound interest. This interest is credited to your account at the end of every financial year. Due to compound interest, your money grows very fast over time, which helps in building a large fund.
How much money can you deposit
You can deposit a minimum of ₹500 and a maximum of ₹1,50,000 in a financial year in a PPF account. If you want, you can deposit a lump sum amount or deposit money in installments every month. If you invest ₹8,000 every month, a total of ₹96,000 will be deposited in a year, which is within the maximum limit of ₹1.5 lakh. Investments made in PPF also get tax exemption under Section 80C of the Income Tax Act, which makes it even more attractive.
How to create a fund of ₹42 lakh from PPF
To know how to create a fund of ₹42 lakh from monthly savings of ₹8,000, we have to understand the calculation of PPF. If you invest ₹8,000 every month for 20 years, the total investment will be ₹19,20,000. You will get a hefty interest of ₹23,41,304 on this investment. In this way, at the end of 20 years, you will have a strong fund of ₹42,61,304.
Maturity period and option to extend it
The maturity period of the PPF scheme is 15 financial years, which does not include the financial year of opening the account. But, if you wish, you can extend this period for 5-5 years. For this, you have to apply at the post office. This feature gives you the opportunity to continue your investment for an even longer period, allowing your fund to grow even bigger.
Why is PPF a great investment option
PPF is an ideal option for those who:
- Are risk-averse
- Want to save taxes
- Want to save for the long term.
- Want safe returns
So, if you want to secure your future and build a large fund without any risk, then the Post Office Public Provident Fund scheme is the perfect way to go. Start investing in this scheme today and meet your financial goals.