Everyone invests in different schemes to get big returns. If you want to get good returns without risk, then there is no better option than PPF, or public provider. Specially after retirement, you can get a regular pension of ₹ 60989 per month, that too a completely tax-free monthly pension. Yes, you’ve heard it right.
PPF
First of all, know that in the hugely popular savings scheme PPF, any Indian can go to any post office or any branch of any bank and open an account, in which the account holder has to deposit a minimum of ₹ 500 and a maximum of ₹ 1,50,000 during every financial year (April 1 to March 31).
EEE Category Scheme PPF never attracts any tax
It would also be good to know the important and beneficial things about PPF, so, remember, the amount deposited in the PPF account every year is exempt from income tax, the interest you get every year in this account is also not taxable, and the entire amount that comes in the hands at the time of maturity, i.e., maturity, is also not under the purview of income tax at all.
PPF can make you Crorepati
How to create a PPF account in 25 years
Now let us tell you how to arrange a pension of about ₹ 61000 every month on retirement. If you are 35 years old and you opened a PPF account at the beginning of this financial year and deposited ₹ 1,50,000, then on March 31 next year, Rs 10,650 will be added to your PPF account as interest, because at this time the Narendra Modi government of the Center is paying interest at the rate of 7.1% on the amount invested in PPF. Thanks to this interest, on the very first day of the next financial year, i.e., April 1, 2025, your PPF account will see a balance of Rs 1,60,650, which will become Rs 3,10,650 if you deposit Rs 1,50,000 before April 5 in the new financial year. After this, on March 31, 2026, the interest at the same rate will be Rs 22,056, and the balance will be Rs 3,32,706.
Start investing at this age
Now PPF investors, you have to deposit ₹1,50,000 in your PPF account between 1st and 5th April every year. In this way, with the help of disciplined investment, at the time of maturity, i.e., after 15 years, your PPF account will show ₹ 40,68,209, in which ₹ 18,18,209 will be interest, and your original investment will be ₹ 22,50,000. But there are still 10 years left in retirement. According to the rules associated with the PPF account, you can extend your PPF account in a block of 5 years by applying before maturity. The extension available for five years can be obtained unlimited times. Now, at the age of 50, you should extend your account and maintain an annual investment routine.
Now your PPF account will come on the verge of maturity when you are 55 years old. At that time, the amount deposited in the PPF account will be ₹ 66,58,288, of which ₹ 36,58,288 will be as interest, and your investment will be ₹ 30,00,000.
Now extend the PPF account once again and keep investing every year as before, because your journey to becoming a millionaire and monthly pension of ₹ 61000 will start now. After five years, this time when your PPF account matures, you will be 60 years old, and the total amount in your account will have crossed the one crore mark.
How will the monthly pension of 60989 Rs be arranged from the PPF account?
Here is another rule related to PPF account extension. Whenever you extend your PPF account, you have two options. One: The investment will continue after extending. Two: Will not be invested after extending. So far, you have extended your account twice but did not stop investing, so the amount kept growing very fast. But now it will not be easy to invest after retirement, so now is the time to get a pension without making a new investment.
Interest of ₹7,31,869 will be received without new investment in the PPF account.
So, you will no longer make a new investment this year but will continue the account. So, this time the accumulated deposit will also remain ₹ 1,03,08,014, and it will earn interest at the end of the year at ₹ 7,31,869. Here we are assuming that the interest rate that is today will remain the same.
Now learn another rule about the withdrawal of money from the PPF account. When you choose to extend the PPF account without investing, you get the right to withdraw the amount once in a financial year. All you have to do is withdraw only the interest amount every year; that is, now you just withdraw this year’s interest amount of ₹ 7,31,869 from your PPF account and deposit it in your savings account. This is your pension, which, if divided over 12 months, you can keep spending ₹ 60989 every month.
