PPF Investment Scheme: If you want to dream of becoming rich, then it is important that you have a good investment option. If you are looking for an instrument to invest in, Public Provident Fund can do wonders.
How to become rich with PPF Investment: From child to elderly one can invest in Public Provident Fund scheme. The biggest advantage of this investment with a lock-in period of 15 years is that it has higher interest rates than other investments. At present, an interest of 7.1% is being given annually, which is much higher than bank fixed deposits. An investment of only 1 thousand rupees a month in the scheme can bring about Rs 3.21 lakh in 15 years.
How much money will you get on investment of ₹ 3000?
Investment in PPF can start from Rs 500. If you deposit only 500 rupees every month, then after 15 years you will have a fund of about 1.6 lakh rupees. At the same time, a fund of about Rs 6.43 lakh can be created in 15 years by investing 2 thousand rupees every month. If you invest 3 thousand rupees, you can get 9.64 lakh rupees. Let us tell you, the maximum investment limit in a financial year is Rs 1.5 lakh.
| Monthly Investment | How much will you get after 15 years | How much will you get after 20 years |
| 500 rupees | 1.6 lakh rupees | Rs 2.65 lakh |
| 1 thousand rupees | 3.21 lakh rupees | Rs 5.30 lakh |
| 2 thousand rupees | 6.43 lakh rupees | Rs 10.60 lakh |
| 3 thousand rupees | Rs 9.64 lakh | Rs 15.91 lakh |
Note: The calculation has been done as a rough estimate at the prevailing interest rate. The interest earned on PPF is reviewed every 3 months.
Open account in post office and bank
You can open PPF account in any post office branch or bank branch. Apart from your own name, you can also open it in the name of children in case of a minor. But, as the caretaker, you will manage the account till he turns 18. As per the rules, a PPF account cannot be opened in the name of a Hindu Undivided Family (HUF).
5 years extension on maturity
The lock in period or maturity period of 15 years on PPF account is 15 years. But, even after this, you can continue with your investment. Meaning you get this facility in PPF that you can extend it for 5 years. You can keep the maturity amount for a total of 20 years. Investments can also be made during this time. However, 1 year before the completion of the maturity period, you will have to submit an application that you want its extension. It can be extended again for 5 years even after completion of 20 years.
Lock in period of 5 years
The lock-in period in the PPF account for pre-withdrawal has been kept at 5 years. Meaning money cannot be withdrawn from this account for 5 years after the year the account was opened. After completion of this period, pre-withdrawal can be done by filling Form 2. However, maturity withdrawal cannot be done before 15 years.
Benefits of EEE tax exemption on PPF
PPF comes under the category of EEE of tax. Meaning, the benefit of tax exemption will be available on the entire investment made in the scheme. Apart from this, the interest earned on that investment and the entire amount received on maturity is also tax free. Therefore, PPF investment counts in a good option according to the long term benefits.
Cannot confiscate any PPF account
The PPF account cannot be confiscated by any court or order at the time of debt or other liability. In this case too, this scheme is good and works.
Cheap Loan Against PPF Account
Cheap loan is also available against the amount deposited in PPF account. But, there is a condition for this. You are entitled to take loan from PPF for a period of five years from the next year except the financial year in which the account is opened. If you have opened PPF account in January 2017, then you can take loan from 1st April 2018 to 31st March 2022. Loan can be availed up to a maximum of 25% on deposit.
