If you are looking for an investment scheme where your money is completely safe and you also get great returns, then the Public Provident Fund (PPF) is a great option for you. This is a popular savings scheme run by the central government, which is currently getting 7.1% annual interest.
In PPF, you can deposit a minimum of ₹ 500 and a maximum of ₹ 1.50 lakh every year. If you want, you can deposit the entire amount at once, or you can also start with a small installment of ₹ 50 every month. Let us understand the rules and benefits of this government scheme in detail.
Features and rules of the PPF account
The biggest feature of the PPF account is its maturity period of 15 years. This means that you can withdraw your entire deposit amount and the interest earned on it after 15 years. If you want, you can also extend it for 5-5 years by filling out the form. You can easily open a PPF account by going to any bank or post office.
If you deposit ₹ 50,000 in your PPF account every year, then after completion of 15 years, you will get a total of ₹ 13,56,070. This will include your investment of ₹ 7,50,000 and interest of ₹ 6,06,070. You should keep one thing in mind that if you do not deposit at least ₹ 500 in a year, then your account may be closed. However, it can be restarted by paying a penalty.
Loan and withdrawal facilities are available on PPF
Since PPF is a government scheme, every penny deposited in it is completely safe. You also get the facility of a loan in this. However, you cannot withdraw money before 5 years of opening a PPF account. Even after 5 years, you can withdraw money only under certain circumstances, such as children’s education or treatment of a serious illness. This rule helps investors maintain discipline and save for the long term.