Post Office Scheme: The Public Provident Fund (PPF) is a savings plan backed by the government that offers total security and isn’t influenced by market changes. That’s why it’s a go-to choice for retirement planning and long-term savings. The returns are consistent and trustworthy.
Currently, the government provides a 7.1% annual interest rate on PPF, which is entirely tax-free. This scheme is categorized as EEE, meaning that your investment, the interest earned, and the maturity amount are all tax-free. Plus, you can get tax deductions of up to Rs 1.5 lakh under Section 80C. If you put in the maximum of Rs 1.5 lakh into PPF each year, that breaks down to about Rs 12,500 a month. If you keep this up for 15 years, your total contributions will reach Rs 22.5 lakh. With interest added, this could grow to over Rs 40 lakh.
PPF isn’t just about investing; it also comes in handy during emergencies. After a few years of having the account, you can take out a loan against it. Additionally, you can make partial withdrawals after five years. This means your money isn’t stuck and can be accessed when you really need it.
Invest Rs 4,000 in PPF to generate Rs 13 lakh corpus
If you invest Rs 48,000 annually in the PPF scheme by saving Rs 4,000 every month and continue your investment for 15 years, you will invest a total of Rs 7.20 lakh. Upon maturity, you will receive a total of Rs 13.01 lakh, resulting in a direct profit of Rs 5.81 lakh. After 15 years, if you continue your investment for another 10 years, you will have a corpus of Rs 32.98 lakh, resulting in a profit of Rs 20.98 lakh.