While planning a retirement, it is necessary to choose an investment that is safe, give stable returns and prepare a good fund over time. Public Provident Fund (PPF) is one such government scheme that can help in creating a strong financial basis for your retirement. In this scheme supported by the government, not only your money is safe, but you also get guaranteed returns.
What is Public Provident Fund?
PPF is a long -term saving scheme, which can be opened through post office and most banks. Tax exemption is also available on investing in it, and the amount on maturity is completely tax free. The scheme is specially designed for those who want safe and stable returns. The lock-in period of PPF is 15 years old, which can also be extended further over a period of 5-5 years.
Who can open PPF account?
Any resident of India (Indian Citizen) can open a PPF account in his name. Parents can also open a PPF account in the name of their minor children. However, there can be only one PPF account in the name of a person, whether in the post office or in a bank. NRI ie overseas Indians cannot open PPF account.
The minimum investment amount is Rs 500 annually and can be invested up to a maximum of Rs 1.5 lakh annually. Whether investing once a year or in small installments every month, it is necessary to maintain discipline and long-term perspective in PPF.
Mathematics of investment from 3 thousand to 9 thousand rupees
If you invest from 3 thousand rupees to 9 thousand rupees every month, then you can prepare a good fund in 18 years.
On investing Rs 3,000 a month
Annual Investment: 3,000 × 12 = 36,000 rupees
Total investment in 18 years: 36,000 × 18 = 6,48,000 rupees
Interest (according to 7.1% return): around 6,75,527 rupees
Total Fund: Rs 13,23,527
That is, by investing Rs 6.48 lakh, you can prepare a fund of Rs 13.23 lakh, which will benefit about 6.75 lakh rupees as interest.
On investing Rs 6,000 a month
Annual Investment: 6,000 × 12 = 72,000 rupees
Total investment in 18 years: 72,000 × 18 = 12,96,000
Interest (according to 7.1% return): About 13,51,054 rupees
Total Fund: Rs 26,47,054
Here you can see that by investing Rs 12.96 lakh, a fund of Rs 26.47 lakh is ready.
Interest rate in PPF
PPF is currently getting 7.1% annual interest, which is reviewed by the government every quarter. If compared to other safe investment options of the market such as fixed deposits (FD), PPF interest is often better. It also contains interest compound, which increases the returns rapidly over time.
Tax benefits
PPF is an EEE (exempt-exmept-exmept) investment. What does it mean:
Tax exemption while investing (under 80C)
The annual interest on PPF is tax free
The entire amount on maturity is also tax free
That is, by investing in it, you can get tax benefits at three levels.
Why choose PPF?
Security of capital: PPF is counted among the safest investment options due to the government’s guarantee.
Fixed interest rate: Despite market fluctuations, it gets stable returns.
Long -term advantage: The effect of compounding gives a tremendous increase in a long time.
Help in preparing retirement funds: Can prepare a thick fund without any risk.
Easy Loan Facility: A loan can also be taken based on PPF account.
conclusion
If you also want to make your future safe and create a strong fund for retirement, then Public Provident Fund (PPF) is a great option. A monthly investment ranging from just Rs 3,000 to 9,000 can give you a fund of lakhs of rupees in 18 years. Be sure to take advantage of this opportunity of safe investment and give your dreams a safe future.
