Post Office Scheme: The Post Office Public Provident Fund (PPF) scheme is a popular and safe investment option that offers good long-term returns through regular savings. If you invest in PPF by saving approximately Rs 12,500 every month, your corpus can reach approximately Rs 40 lakh after 15 years.
This scheme is suitable for those who want to grow their savings without taking any risk and also want to benefit from tax savings. The interest earned on PPF is approximately 7.1% per annum and is completely tax-free, meaning you do not have to pay any tax on the interest.
Minimum investment amount and tenure
Under this scheme, you can open a PPF account with just Rs 0 to Rs 500 and start investing. Each financial year, you can invest up to Rs 1.5 lakh, which can be deposited in monthly or annual installments. The lock-in period for PPF is 15 years, but you can extend this period by 5 years at a time. This means your savings remain safe for a longer period, making it ideal for larger purposes like your retirement fund or your child’s education.
Another unique feature of the plan is that you can take a loan after 1 year and make partial withdrawals after 5 years. This allows you to access funds to meet emergencies without closing your account. This plan provides support for emergency expenses while ensuring your financial security.
Tax benefits and protection
Investments in the PPF scheme offer tax benefits under Section 80C. Both the investment and the interest earned are completely tax-free, further increasing your total savings. Furthermore, investments in this scheme, managed by the Post Office, are safe and guaranteed by the Government of India.
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