Post Office PPF Scheme: Lakhs of Indians invest in Post Office schemes. It is still considered the most reliable option for savings. There is no risk of any kind in investing here. Returns are guaranteed. Post Office has great schemes for everyone, from children, women to senior citizens. Post Office Public Provident Fund Scheme is included in this list, which is considered better in terms of investment. You can create a huge fund by depositing money in this scheme.

Public Provident Fund (PPF) has always been considered a safe and tax-free investment option. It is a small savings scheme of the Government of India. The central government is currently paying an annual interest of 7.1 percent on PPF. Money has to be deposited in a PPF account at least once a year. If you want, you can invest a lump sum in a PPF account in a year or you can also deposit money in installments. A minimum of Rs 500 and a maximum of Rs 1.50 lakh can be deposited in a PPF account in a year.

How much fund will be there if you deposit Rs 50,000 annually?

The biggest strength of PPF is compounding. This means that the sooner you start investing, the more time your money will get to grow. However, a small investment started at the age of 20-25 can create a much larger corpus than a large investment started at the age of 40-50. A PPF account matures in 15 years. If you want, you can extend it for the next 5 years by filling a form.

Any PPF account can be extended for 5-5 years and run for a maximum of 50 years. PPF account can be opened in any bank. If you want, you can also open a PPF account by going to your nearest post office. If you deposit Rs 50,000 every year in your PPF account, then after 25 years you will get a total of Rs 34,36,005. Let us tell you that this includes Rs 12,50,000 of your investment and Rs 21,86,005 of interest.

 

Tax benefits in PPF

PPF falls under the Triple-E (Exempt-Exempt-Exempt) category. This means that it provides tax exemption at three levels. First – you will get tax exemption under section 80C on investment up to Rs 1.5 lakh every year. Second – the interest received on the investment will be completely tax-free and third – no tax is to be paid on the entire amount received on maturity of 15 years. This is the reason why PPF is considered more beneficial than options like FD.

 

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