PPF (Public Provident Fund) is considered a great and safe investment option, especially for those who avoid taking risks. It not only gives stable returns but also offers the benefit of tax savings. PPF is considered a popular savings scheme for retirement planning, and it can also be extended after maturity. The special thing is that after maturity it can also be used as a monthly income, which can provide tax-free income of up to Rs 24,000 every month. This is a great way to make your future more secure and better diversify your portfolio.
Great option for safe investment and tax savings
Public Provident Fund (PPF) is a long-term savings scheme, which gives 7.1% annual interest. A minimum of ₹ 500 and a maximum of ₹ 1.5 lakh per year can be invested in it. This scheme is for 15 years and the interest earned is completely tax-free. Investments are also eligible for a deduction of up to ₹ 1.5 lakh under Section 80C of Income Tax. It is a safe and risk-free investment, which gives guaranteed returns. For those who want to save for the long term and save taxes, PPF can be a great option.
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PPF Rules
The maturity period of a PPF (Public Provident Fund) account is 15 years, but it can be extended for 5 years within a year of maturity. This process can be continued further. If the account holder wishes, he can retain his funds even after maturity without extension and new deposits. However, closing a PPF account before 15 years is not allowed.
How much return will you get in PPF in 15 years
If you invest ₹ 1.5 lakh every year in the Public Provident Fund (PPF) and maintain it for 15 years, then as per the current 7.1% interest rate, your total investment will be ₹ 22,50,000. The interest received on this will be ₹ 18,18,209, making the total amount ₹ 40,68,209. That is, your investment can almost double in 15 years.
An annual investment of ₹ 1.5 lakh will give a fund of Rs 1.03 crore in 25 years
If you invest ₹ 1.5 lahks every year in the Public Provident Fund (PPF) and it runs at an interest rate of 7.1%, then after 25 years you can get a huge return.
Total Investment: ₹ 37,50,000
Interest Income: ₹ 65,58,015
Total Fund: ₹ 1,03,08,015
This means that a huge fund of Rs 1.03 crore can be created in 25 years with only disciplined investments. PPF also offers the benefits of tax exemption and guaranteed returns, making it an excellent investment option.
Documents required to open a PPF account
- Duly filled account opening form
- KYC documents like an Aadhaar card, voter ID, driving license
- Proof of address
- Nomination form
- Passport size photo
The process to open PPF account online
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- Log in to your bank account through internet banking or mobile banking.
- Choose the ‘Open PPF Account’ option.
- If you are opening the account for yourself, choose ‘Self Account’. If you are opening an account for a child, select ‘Minor Account’.
- Fill in the information asked in the application form.
- Enter the amount to be deposited annually.
- After applying, enter the OTP sent to your registered mobile number.
- The account will open immediately and the PPF account number will be displayed on the screen. You will also receive an email with all the details.