Public Provident Fund Account: Regular income after retirement is a concern for everyone. After retirement, the source of income disappears. Financial security is a major concern for both employed and self-employed individuals. In this era of ever-rising inflation, ensuring a regular, tax-free income can make old age much more comfortable. The Public Provident Fund (PPF) is a government scheme that builds a strong fund over the long term, ensuring that you won’t face any financial difficulties after retirement.

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This scheme is truly remarkable.

We’re talking about the PPF scheme, one of the safest small savings schemes run by the central government. The government provides fixed interest rates on investments, making it considered completely safe. The investment age for this scheme is 55 to 60 years. The most significant feature of this scheme is that the amount invested, the interest earned, and the full maturity amount are tax-free. This is why it is called an EEE category scheme.

Interest Earned

The PPF scheme currently offers an annual interest rate of 7.1%. You can invest a minimum of ₹500 and a maximum of ₹1.5 lakh in this scheme. If you invest regularly in PPF for 15 years, you can accumulate a substantial corpus. The entire amount received upon maturity is tax-free. Account holders can also extend the account in blocks of 5 years.

Where and How to Open a PPF Account

If you want to open a PPF account, you can do so at any post office or bank branch in the country. Now, the question arises: if you want a monthly pension of ₹61,000, when should you start investing? Let’s learn about its calculation.

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How to get a pension of Rs 61,000?

If you want a monthly pension of Rs 61,000 and you open a PPF account at the age of 35, you then invest Rs 1.5 lakh in the PPF account. The interest earned at the rate of 7.1% will increase the amount to Rs 1,60,650 in the second year. The total balance the following year will be Rs 3,32,706. Similarly, after 15 years, the total amount will be Rs 40,68,209. The total amount invested is Rs 22.50 lakh, and the interest earned will be Rs 18,18,209.

If you open an account at the age of 35, the maturity amount will be received at the age of 50. However, you still have 10 years left for retirement. According to the rules, you can extend the account for 5 years. At age 55, the total amount will be ₹6,658,288. The total investment will be ₹30 lakh. If you extend the account once more, you will reach 60 years of age. Your total amount will now be ₹1,03,08,014. After this, you will receive a monthly pension of ₹61,000.