Post Office Small Savings Scheme Public Provident Fund (PPF) is a very popular scheme for investment and savings in the country. This Small Savings Scheme is also known as Retirement Savings Scheme. But did you know that even after the maturity of this scheme, it can be used as a monthly income?
Even after maturity, there is a rule to extend and withdraw the actual Public Provident Fund. By taking advantage of this special rule, a tax-free income of ₹ 24,000 can be earned every month. You must know about this precious rule.
Facility of extension even after maturity
There is a facility to extend the Public Provident Fund even after maturity i.e. 15 years. This account can be extended for 5 years at a time. That is, you can extend it 5 years at a time. This can help achieve your long-term financial goals.
If you extend the scheme without investing after the maturity of 15 years, then you will continue to get 7.1 percent annual interest (PPF interest rate) on the closing balance after 15 years. Whereas, if you extend it with investment, then interest on interest will continue to be added to the scheme just like before maturity. This is an amazing way to grow your funds even faster.
When you extend the scheme for 5 years without investment, you can withdraw any amount once a year. Whereas, if you extend it with investment, you can withdraw up to 60 percent of the amount once a year. This gives you the freedom to access your funds whenever you need them.
PPF Calculator
If you deposit the maximum amount in PPF every financial year till maturity i.e. for 15 years, then according to the current interest rate, a total fund of ₹ 40,68,209 can be created. This provides a strong financial foundation for your future.
How will you earn ₹ 24,000 every month
Here you ran the scheme for 15 years and created a fund of ₹ 40,68,209. Now if you extend it for 5 years without investing anything, you will get 7.1 percent annual interest on the closing balance. This will be ₹ 2,88,843 in a year. You can withdraw this entire interest amount once a year. If you divide it into 12 months, it will be ₹ 24,000 per month. This can become an amazing source of monthly income for you.
Now if you extend it for 5 years without investing anything, you will get 7.1 percent annual interest on the closing balance. This will be ₹ 4,72,738 in a year. You can withdraw this entire interest amount once a year. If you divide it into 12 months, it will be ₹ 39,395 per month. This can be an attractive monthly income option for you.
How to open a PPF account
Any Indian citizen can open this account in the Post Office Small savings in his or his child’s name. The following documents will be needed for apply in this scheme:
KYC documents that verify the identity of the person, such as Aadhaar card, voter ID card, driving license etc.
PAN card
Address proof
Form for declaration of nominee
Passport size photo