A lot of folks dream of becoming millionaires and are on the lookout for smart investment opportunities that promise big returns. If you’re curious about how much you can earn from your investments and want to avoid income tax, the Public Provident Fund (PPF) can help ease your mind.

 

This scheme offers solid returns on your investment and a way to save on taxes. If you’re thinking about retirement or aiming for long-term income from your investments, PPF is a great option. It’s commonly known as PPF.

 

So, why is PPF such a popular choice?

 

The Public Provident Fund is favored because the money you put in, the interest you earn, and the total amount you receive at maturity are all completely tax-free. This places it in the EEE category, which stands for Exempt-Exempt-Exempt. You can claim tax exemptions on your deposits each year, and you won’t owe any tax on the interest you earn annually. When your account matures, the entire sum is tax-free as well.

 

Who can invest in PPF?

 

1. Any citizen of India can participate in this Small Savings Scheme.

2. You can open an account at a post office or any bank.

3. You can invest a minimum of Rs 500 and a maximum of Rs 1,50,000 each financial year.

4. Interest is calculated annually.

5. However, the interest rate is fixed quarterly, and currently, it stands at 7.1%.

6. The maturity period for PPF is 15 years.

7. Joint accounts aren’t allowed, but you can designate a nominee.

8. For accounts opened for children, the guardian’s name is included, but this is valid only until the child turns 18.

 

How can you become a millionaire with PPF?

 

The Public Provident Fund (PPF) is a great way to work towards becoming a millionaire with relative ease. To achieve this, consistent investments are key. For instance, if you start a PPF account at the age of 25 and contribute the maximum amount of Rs 1,50,000 between the 1st and 5th of the financial year, you can expect to earn Rs 10,650 in interest by the start of the following financial year. This means that on the first day of the new financial year, your total balance will be Rs 1,60,650.

 

If you repeat the same process next year, your account balance will reach Rs 3,10,650. You’ll deposit another Rs 1,50,000, and interest will be calculated on the total amount. This time, the interest earned will be Rs 22,056 due to the compound interest formula. Now, let’s say you’ve completed 15 years of PPF maturity; your account will then show Rs 40,68,209. Out of this, the total amount you deposited will be Rs 22,50,000, meaning you’ll have earned Rs 18,18,209 just from interest.

 

Desclaimer: For any financial invest anywhere on your own responsibility, Times Bull will not be responsible for it.