PPF Scheme: There are many investment options available, including mutual funds and many government schemes. While some people prefer to invest in mutual funds, some people want to stay away from the risk associated with the stock market but do think about investing. In such a situation, some government schemes give you good returns without any risk. One of these schemes is the Public Provident Fund (PPF).
This is a post office scheme. Under this scheme, you can invest starting from ₹ 500. If you are looking for a safe and long-term investment, then PPF can be a great option for you. Let us know about its benefits in detail.
Investment in Public Provident Fund
The Public Provident Fund is a popular scheme of the post office. In this, you can invest up to ₹ 1.5 lakh starting from ₹ 500. The duration of the PPF scheme is 15 years and apart from this, you also get tax benefits in this scheme. This scheme is a very good option for those who want to save for their children’s future. This scheme offers an interest rate of 7.1%. Suppose you invest ₹1000 every month in this scheme, you can deposit more than ₹8 lakh in a few years. Let’s understand this calculation.
Important things for investment
If you invest ₹1000 every month in PPF, you will deposit ₹12,000 annually. As we told you this scheme matures after 15 years, but to add an amount of ₹8 lakh, you have to extend it twice in blocks of 5 years each and invest continuously for 25 years.
If you invest ₹1000 every month for 25 years, you will invest a total of ₹3,00,000. On this amount, at an interest rate of 7.1%, you will get ₹5,24,641 from interest alone. After maturity, you will get a total of ₹8,24,641 (₹3,00,000 principal + ₹5,24,641 interest).
Tax savings too
PPF is an EEE category scheme, which means there are three ways to save tax. In this category of schemes, there is no tax on the amount deposited annually, apart from this, there is no tax on the interest received every year. Apart from this, there is no tax on the entire amount received after maturity. Thus, the Post Office PPF scheme is a safe and perfect option to save tax.
