You all know that every person wants to save some part of their earnings and invest it somewhere, where their money is safe and also gets good returns. In such a situation, the PPF scheme (Public Provident Fund) of the post office can be a very reliable option for you. This scheme is especially for those who want to get tax-free returns without taking much risk. Let us know the features of this special scheme in detail and understand how you can create a big fund of up to ₹ 40 lakh by saving a little every month.
PPF Scheme
PPF (Public Provident Fund) is a very popular investment option backed by the Government of India. The biggest feature of this scheme is that the government gives tax-free interest of 7.1% annually on it, that is, you will not have to pay any tax on the returns you get. The investment period in this scheme is 15 years, which you can extend for 5-5 years after the completion of 15 years. This long-term investment gives you the tremendous benefit of compounding interest.
How to create a big fund of ₹ 40 lakh
If you invest ₹ 1.5 lakh every year or ₹ 12,500 every month in a PPF account, then after 15 years, your total investment will be ₹ 22.5 lakh. But, with an interest rate of 7.1% per annum, this amount will grow to around ₹ 40.7 lakh. In this way, with just small monthly savings, you can lay the foundation for a strong financial future.
How to open a PPF account and how much to invest
You can start investing in the PPF scheme with a small amount of just ₹ 500. The maximum annual investment limit in this is ₹ 1.5 lakh. If you want, you can also deposit this amount in small installments every month. That is, if you save ₹ 12,500 every month, then your entire investment of ₹ 1.5 lakh will be done in a year. You can easily open your PPF account in any post office or bank. This account gives you the protection of the government, so that your money is completely safe.
Loan and withdrawal facility
Another special feature of the PPF scheme is that you can withdraw some amount even during the lock-in period of 15 years if you need money. You can make a partial withdrawal from your account after the fifth year. Apart from this, after the third financial year, you can also take a loan against your PPF account. These features make it a very flexible and safe investment option.