PPF: Are you looking for a safe and profitable investment option, Then PPF may be perfect for you. PPF means Public Provident Fund, which can be opened in any nearby post office.
It is a small savings scheme, also known as a retirement savings scheme. There is a rule to extend and withdraw PPF even after maturity.
By taking advantage of this special rule, tax-free income of ₹ 24 thousand can be earned every month. You should know about this special rule.
Maturity of 15 years, 7.1 percent annual interest
The maturity of the Public Provident Fund (PPF) is 15 years. Currently, 7.1 percent annual interest is available on this scheme.
A maximum of ₹ 1.50 can be deposited in this scheme in a financial year. However, even after maturity, to create a larger fund, you can extend this scheme for 5-5 years as long as you want.
There is also a rule that after maturity, if you want you can continue investing and increase it or you can extend it without investing anything.
If you extend the great scheme after maturity, you will continue to get the benefit of 7.1 percent annual interest on your final closing balance.
Whereas if you continue investing, the scheme will work the same way as it did before maturity.
On maturity, you can get ₹41 lakh
Deposit in one financial year: ₹1.50
Annual interest: 7.1 per cent
Maturity period: 15 years
Fund on maturity: ₹40,68,209
How to create a fund of ₹1 crore
If you extend the scheme twice for 5 years and 5 years after the maturity of 15 years, then.
Deposit in one financial year: ₹1.50
Annual interest: 7.1 per cent
Total period of investment: 25 years
Fund after 25 years: ₹1.02 crore
PPF: How to earn ₹24,000 monthly
Here you ran the scheme for 15 years and created a fund of ₹40,68,209. Now if you extend it for 5 years without investing anything, you will get 7.1 percent interest on the closing balance.
Also, you can withdraw any amount once in a year. Suppose you have planned to withdraw only the interest money once in a year.
Here, you will get 7.1 percent annual interest on your closing balance. This will be ₹2,88,843 in a year.
You can withdraw this whole entire interest amount in single go in a year. If you divide it into 12 months, it will be ₹24,000 per month. There will be no tax on this withdrawal.
Here you ran the plan for 25 years and created a fund of ₹1 crore. Now if you extend it for 5 years without investing anything, you will get 7.1 percent interest on the closing balance.
Also, you can withdraw any amount once in a year. Suppose you plan to withdraw only the interest money once a year.
At a 7.1 percent annual interest rate on ₹1 crore, ₹7,31,300 interest will be added to the account in a year.
You can withdraw this whole entire interest amount in single go in a year. If you divide it into 12 months, it will be around ₹60,000 per month. There will be no tax on this withdrawal.