PPF vs Mutual Fund: Heavy fluctuations in the stock market keep increasing the anxiety of investors, especially small and new investors. Both stocks and mutual funds are risky investment options. In such a situation, if you want to stay away from market risk and invest with safe and guaranteed returns, then the ‘Public Provident Fund’ (PPF) can be a great option for you. This article will introduce you to every detail of PPF so that you can confidently build a strong financial future.
PPF
PPF i.e. ‘Public Provident Fund’ is a government investment scheme run by the central government, which ensures the complete safety of your money. At present, PPF is getting an annual interest rate of 7.1%. This is the annual compound interest rate. You can open a PPF account in any bank or post office in the country. This is an investment you can trust blindly.
Special features of PPF
In PPF, you have to invest at least ₹500 annually. It is accessible even for small investors!
You can deposit a maximum of ₹1.5 lakh in a year. This is an opportunity for good savers.
If you want, you can invest a lump sum or deposit money in installments too. It offers flexibility according to your financial flow.
By depositing ₹1 lakh every year, you will get an amount of more than ₹27 lakh after 15 years. This is a classic example of long-term wealth creation.
Tenure and Returns
The PPF scheme matures in 15 years. If you invest ₹1 lakh every year, on maturity you will get a total of ₹27,12,139. This includes the total ₹15 lakh invested by you as well as the fixed interest of ₹12,12,139. Any citizen of India can open an account in this government scheme.
You can also start investing in PPF in the name of your minor child! However, keep in mind that only one PPF account can be opened in the name of an individual. It is a powerful tool for financial planning.