PPF Update: The Public Provident Fund or PPF is one of the most popular, long term investment options in India. It is a government backed, high yielding, small savings scheme meant to create long term wealth for investors post retirement. Introduced in 1968 by the Ministry of Finance’s National Savings Institute, PPF has become a powerful tool for Indians wherein they can enjoy tax benefits. The scheme has emerged as one of the most sought-after investment options due to the safety, returns and tax benefits it offers. It is a 100 per cent risk free investment as the fund is backed by the Government of India, and it does not move in line with stock exchange rates that tend to change from day to day.
How to Get Maximum Benefits Out of Your PPF Account?
Investors can invest their money in their PPF account for as many as 15 years in a row, as per the guideline. However, if one does not need the money at the end of 15 years, he or she can can extend the tenure of the PPF account for as many years as needed. This can be done in blocks of five years by submitting a PPF Account Extension Form. Being one of the very few schemes to come under the ambit of EEE rule, it is advisable that investors keep the money in their PPF accounts, even of they do not contribute anything, to earn maximum benefits under tax rules too.
The interest rate of PPF, fixed at 7.1 per cent currently, is one of the highest in terms of fixed income products which have a backing from the government. So, if you invest Rs 1.5 lakh a year for 15 years, you get almost 41 lakh during maturity.
Invest Rs 250 a Day, Get Rs 62 Lakh from PPF
If you invest Rs 250 a day in your PPF account, the monthly investment value comes to around Rs 7,500. This means that per year, you are investing a little more than Rs 91,000 in your Public Provident Fund account. If you keep doing this from the age of 25 up to the age of 50, that is for 25 years, the amount that you will get during maturity will be as much as Rs 62.5 lakh. This amount will be totally tax free and the total interest earned will be nearly 40 lakh. The total amount you would have deposited in 25 years will turn out to be Rs 22.75 lakh.
However, if you cannot invest such a huge amount, there is no mandate that you have to. Public Provident Fund is flexible in nature in terms of investment as individuals can invest as low as Rs 500 per year into their accounts. PPF accounts can be opened online or one can also visit their banks to set up the account.
Read all the Latest News, Breaking News and Coronavirus News here.
Source: News18