Government Scheme: Investment in the stock market is subject to risks. Not everyone can take market risk. In such a situation, there is such a powerful government scheme, in which if you invest from a long-term perspective, then you can guarantee a corpus of crores of rupees.
Government Scheme: A hit mantra of the market is to start investing early and stay for a long time. This gives tremendous benefits of compounding and you can build a corpus of crores long before the age of retirement. Whenever we talk about long term investment, it is said about equities. But, investing in the stock market is subject to risks. Not everyone can take market risk.
In such a situation, there is such a powerful government scheme, in which if you invest from a long-term perspective, then you can guarantee a corpus of crores of rupees. Apart from this, your money will be completely safe, whether the market falls or rises, your money will continue to earn guaranteed interest every year. Also, this scheme is also effective in saving you tax in every way. Overall, it is a hit formula to become a millionaire with guaranteed tax free income. Yes! We are talking,
PPF: Will become a millionaire in 25 years!
Public Provident Fund (PPF) is a superhit scheme of investment from long term perspective. PPF can be opened at the post office or at Athraj Bank. At present, the interest rate on PPF is 7.1 percent per annum. The maturity of this account is 15 years, which can be extended in blocks of 5-5 years. One can invest a maximum of Rs 1.50 lakh in a PPF account in a year. The maturity of PPF account is 15 years. Can be carried forward in blocks of 5 – 5 years from the date of maturity. At present, the interest rate on PPF is 7.1 percent per annum. Compounding is done on an annual basis.
Understand the calculation
Suppose you are 25 years old and invest Rs 12,500 every month in PPF account. That is, your annual investment is 1.5 lakh rupees. According to the PPF calculator, your total corpus on maturity in 15 years will be Rs 40.68 lakh. In this, you will have investment of Rs 22.50 lakh and income from interest will be Rs 18.18 lakh. Now if you extend your account in a block of 5-5 years, then after 25 years the entire corpus of the PPF account will be more than 1 crore (1,03,08,015). In this, your investment will be 37.50 lakhs and interest income will be around 65.58 lakhs.
It is to be noted here that in this calculation, 7.1 percent annual interest has been taken for the next 5-5 years after the maturity of the entire investment period i.e. 15 years. The interest rates are reviewed by the government every quarter. In such a situation, the maturity amount can fluctuate with the change in interest rates.
Huge Tax Benefit: Benefit in EEE Category
The biggest advantage of the PPF scheme is that it provides tax benefits under section 80C of the Income Tax Act. In this, deduction can be taken for investment up to Rs 1.5 lakh in the scheme. The interest earned and maturity amount in PPF is also tax free. In this way, investment in PPF comes under EEE category. Most importantly, the government sponsors small savings schemes. Therefore, the subscribers get complete protection on investment in this. In this, there is a sovereign guarantee on the interest earned.
