Public Provident Fund (PPF) is very popular among small investors. You can open a PPF account in a bank or a post office. In PPF, you can invest from ₹500 to ₹1.5 lakh in a year. This money can be invested every month or at one time in the year. For monthly investment, you can give standing instructions to the bank or transfer money online to your PPF account.
By investing up to ₹1.5 lakh in PPF every year, you also get tax exemption. Under Section 80C of Income Tax, this exemption is given. The interest you earn is tax-free, and the full amount you get on maturity is also tax-free. This means you get three benefits at the same time when you invest in PPF.
₹5,000 Monthly Investment: Total After 15 Years
- Total money you put: ₹5,000 × 12 × 15 = ₹9,00,000
- Interest you get: about ₹7,27,284
- Money you get at last: about ₹16,27,284
If you put ₹5,000 every month in PPF, you will get around ₹16.27 lakh after 15 years. This money is tax free. You will not pay any tax.
Time Can Be More
In PPF, you can make the time more after 15 years. You can add 5 years, again 5 years, and so on. In this way, you can keep money for 20 years or 25 years also. PPF is good for long time saving. Many people use it for retirement plan.