New Delhi: By investing in Post Office schemes, you can accumulate substantial interest earnings. Moreover, these schemes enjoy the highest level of public trust. You have likely heard of the Post Office’s Public Provident Fund (PPF) scheme. If you aspire to build a sizable financial corpus for your future or retirement, look no further.
In addition to being a secure investment, this scheme also offers protection against tax liabilities. This is precisely why the PPF can prove to be a true “game-changer” for you. Read on to understand, in detail, how this scheme—driven primarily by interest earnings—can help you fulfil your dream of becoming a ‘Lakhpati’ (someone with assets worth lakhs).
key highlights
Interest rate
7.1%
Per annum
Lock-in period
15 years
Mandatory
Max deposit/year
₹1.5 lakh
Min: ₹500/year
Tax status
EEE
Triple tax-exempt
Savings on Both Interest and Taxes
The Post Office’s PPF scheme currently offers an annual interest rate of 7.1% on deposits. This scheme holds “EEE” (Exempt-Exempt-Exempt) status. This implies that the principal amount invested qualifies for tax exemption. Most notably, the interest accrued on the investment is entirely tax-free. Furthermore, the entire lump sum received upon maturity remains exempt from taxation. Under Section 80C of the Income Tax Act, you can also claim tax deductions on investments of up to ₹1.5 lakh per annum.
Know the Investment Terms
If you are contemplating an investment in PPF, rest assured. You can initiate your investment with a minimum annual contribution of just ₹500. The maximum amount you can deposit in a year is capped at ₹1.50 lakh. This scheme also comes with a mandatory lock-in period of 15 years.
Any Indian citizen is eligible to open a PPF account. Parents can also open an account in the name of a minor child. However, the facility for opening a joint account is not available under this scheme.
How to Earn Up to ₹18 Lakhs Solely Through Interest
The PPF offers the potential for substantial financial returns. If you choose to invest the maximum permissible limit of ₹1.5 lakh per annum in this scheme, here is how the earnings would be calculated: Over a period of 15 years, a total of ₹2,250,000 will be deposited; at an interest rate of 7.1%, the total accrued interest will amount to ₹1,818,209, resulting in a total maturity value of ₹4,068,209. In other words, you will receive approximately ₹1.8 million more in interest than the total amount you deposit.
Disclaimer
Please note that this article is intended solely to provide general information. DNA Hindi assumes no responsibility for the accuracy or completeness of the information and facts presented herein. Readers are advised to consult with an expert before making any decisions; it is recommended to undertake any investment only after seeking professional advice.
