PPF 5 Key Factor: There are many investment options in today’s time, despite this PPF is one such product which is definitely included in the portfolio of investors. Its many features make this scheme reliable and favorite for investors. Here know why PPF should be included in the portfolio.
A good amount is added
PPF is a scheme in which anyone can invest. It has an interest rate of 7.1 percent. A maximum of Rs 1.5 lakh can be deposited in it annually. This scheme matures in 15 years. In such a situation, a good amount of money can be added through this scheme in the long term.
Income tax benefits
Public Provident Fund is a scheme of EEE category. A maximum of Rs 1.5 lakh can be rebated on investment in it under section 80C of the Income Tax Act. The most special thing about PPF is that the interest earned in the scheme and the money received on maturity is completely tax free. In this way, you get tax benefits in three ways.
Benefit of compounding interest
By investing in PPF, you get the benefit of compounding interest. That is, interest is paid on the interest along with the principal. In such a situation, your money grows rapidly. To make money, you just need to keep the investment disciplined.
Government guarantee
People do not hesitate to invest in PPF for a long time because they get government guarantee in it. PPF is directly regulated by the Central Government and the interest rate is also decided by the government. Anyone, be it a child, young, old, woman, can invest in PPF. Whereas long term schemes like Sukanya Samriddhi Yojana and Senior Citizen Scheme are for a special class.
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The more time, the bigger the fund
PPF matures in 15 years, but you also get the facility of extension in it. You can extend the scheme in blocks of 5-5 years. The advantage of this is that your regular investment over a long period helps you create a big fund. Apart from this, if you do not extend it after maturity but also do not withdraw the money, then you keep getting interest on the deposited amount.
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