Public Provident Fund Scheme: The PPF Scheme, also known as the Public Provident Fund Scheme, offers good interest rates on investments. Additionally, the scheme offers an income tax exemption. This scheme is extremely popular in the country.
The Government of India launched the Public Provident Fund (PPF) Scheme, a savings scheme that allows investors to save for a long period and benefit from tax savings.
A complete understanding of this scheme may be helpful if you plan to invest. You should be aware of the rules and how many PPF accounts a person can open. Let’s find out what the rules are.
Is it possible to open multiple accounts in PPF?
The PPF scheme is a savings scheme, and a person can open only one account in the PPF (Public Provident Fund) scheme. You cannot open more than one PPF account in your name.
However, parents can open separate PPF accounts for their minor children. A person can have one PPF account in his name and another in the name of his minor child, but the total amount of contribution in both accounts should be within the annual limit (currently ₹ 1.5 lakh).
The Public Provident Fund Scheme has a 15-year maturity period. However, you can extend it for an additional 5 years. After maturity, there is an option to continue the scheme for another 5 years. You can extend it for 5 years as many times as you want.
Section 80C of the Income Tax Act exempts investments made in the PPF account. That is, you get an income tax exemption on your investment. The government determines the interest rate on PPF every quarter, and this interest is exempt from income tax.
The PPF scheme has specific rules for investing.
The minimum investment limit in the Public Provident Fund Scheme is Rs 500, while the maximum investment can be made up to Rs 1 lakh 50 thousand. You have the option to invest in it either in one lump sum or in installments.
The current interest rate This scheme’s current interest rate is 7.1% (2023-24). For your information, the government constantly modifies the interest rate, and this scheme calculates the interest based on the minimum monthly deposit from the 5th to the end of the month.
How much will you earn in 15 years if you deposit Rs 1000 every month?
If we calculate on investing Rs 1000 per month at the current interest rate of 7.1%, then the total investment during the maturity period of 15 years is Rs 180000.
And if we calculate by considering the interest rate as constant, then the interest at the rate of 7.1% comes to Rs 145457. The total interest and the principal deposit amount add up to approximately Rs 3,25,457 upon a 15-year maturity.