Post Office Scheme: There is a tremendous option in the government’s small savings schemes to create a guaranteed corpus from a long-term perspective. One of these options is Public Provident Fund (PPF).
Post Office Scheme: There is a tremendous option in the government’s small savings schemes to create a guaranteed corpus from a long-term perspective. One of these options is Public Provident Fund (PPF). PPF account can be opened in any branch of the post office. Apart from this, PPF account can also be opened in designated banks.
From January 1, 2023, 7.1 percent interest is being received annually on the PPF account. In this compounding of interest is done on an annual basis. The maturity of PPF account is 15 years. That is, it is a long term investment option.
That is, PPF is a better option for those who aim to create funds for the future. One of its specialty is that there is no market risk on investment in it. Apart from the investment being safe, the returns are also guaranteed.
PPF account will be opened with ₹ 500
PPF can be opened with a minimum of Rs 500. In this, a maximum of Rs 1.50 lakh can be deposited in a financial year. There is a facility to extend this account further in the bracket of 5-5 years after maturity.
Guaranteed security on every penny deposited in the post office. Whereas in banks, insurance is available only for an amount up to 5 lakhs. That is, if the bank sinks, only your amount of 5 lakhs will be safe.
How to make a fund of ₹ 1 crore
Maximum monthly deposit: Rs 12,500
Maximum annual deposit: Rs 1,50,000
New Interest Rates: 7.1% compounding annually
Amount on maturity after 15 years: Rs 40,68,209
Amount at maturity after 25 years: Rs 1.03 crore (increasing investment in 5-5 year breaks)
Total Investment: ₹37,50,000
Interest Benefit: ₹65,58,015
(Note: According to 7.1 percent interest rates, it will take 25 years to create a fund of 1 crore. While for this, Rs 37,50,000 will have to be invested. The government reviews the interest rates every quarter. The investment amount or period will change if the rates change. might change.)
Tax benefit in EEE category
There are many benefits of opening a PPF account. The biggest benefit will be in tax saving. In terms of tax benefits, it comes under the EEE (Exempt, Exempt, Exempt) category.
Tax deduction can be claimed under section 80C on deposits of Rs 1.50 lakh annually in PPF. For this, maturity fund and interest income are also tax free.
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