Have you just got a job, but are not able to save any money to fulfill your hobbies? So are you planning to save some of your salary from the beginning of the new year? Then know about a very simple investment. Today we will know how to save money in PPF i.e. Public Provident Fund. This investment does not have risks like mutual funds or stocks. Rather, there is a guaranteed return on this investment. Therefore, many people are easily relying on this investment.
What is PPF?
PPF or Public Provident Fund is a tax-free scheme of the central government. The investment in which interest is earned at a compound interest rate. Only 500 rupees are required to open this account. Only if someone deposits 500 rupees in a year, the scheme will be operational. The maximum investment amount is 1.5 lakh rupees in a financial year.
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For how many years is this savings?
PPF is a government savings scheme, along with savings, huge interest is also available in this scheme. If you want to keep money in this scheme, you can deposit money from 15 to 50 years. Even if the scheme expires after 15 years, you can keep this money for another five years.
How to invest?
You can deposit the money in this scheme at once if you want, or you can divide it into monthly installments and deposit it in the bank if necessary. This scheme is tax saver. Because if you deposit Rs. 1.5 lakh in a year, it will be under tax deduction (80 C).
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How to withdraw the money?
You can take a loan for emergency needs only after three years from the date of commencement of your PPF tenure. And after seven years, you can withdraw part of the deposited amount. And after 15 years, you can withdraw the entire amount.
Who can open a PPF account?
Any Indian citizen can open a PPF account. In addition to adults, those who are below the age of 18 can open a PPF account, in which case the account must be opened by their guardians.
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How much interest is available?
The interest rate of PPF is determined by the government every three months. Currently, i.e. in the financial year 2024-25, the annual interest rate is about 7.1 percent. And this interest is determined at a compound interest rate.
How to open a PPF account?
If you have an account with a state-owned bank like SBI, HDFC, ICICI or BOB, you can open a PPF account from home.
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How to open a PPF account online
Log in to net banking. Now go to options and select the PPF account option and go to the ‘Investment’ or ‘Services’ section to open a PPF account. Then fill in the required details and upload the digital copy of important documents like Aadhaar card, PAN card and deposit a minimum of Rs 500. After that, your account will be opened as soon as you download the confirmation document.
How will the interest rate be determined?
Experts say that if a person deposits Rs 2,000 every month in a PPF account, the investment amount at the end of the year will be Rs 24,000. And the total investment amount in 15 years will be Rs 3,60,000. And the interest rate at the rate of 7.1 percent on the total amount deposited for 15 years will be Rs 2,90,000. As a result, the investor will receive a total of 650,000 taka when the PPF term ends after 15 years.