PPF Investment: Public Provident Fund account cannot be withdrawn for 5 years from the date of opening. Because, a lock-in of 5 years has been kept. Withdrawal can be done after 5 years by filling Form 2.
PPF Investment: Public Provident Fund (PPF) is a better investment option for long term. Investing in PPF is not only safe, but it also gets full benefits of tax exemption. For investors, the risk in this is negligible. If you want to raise a huge fund by investing monthly, the Public Provident Fund (PPF) scheme will be perfect for this. To get income tax exemption for the year 2021-22, you have to invest in the scheme by 31st March. The scheme is currently getting 7.1% interest per annum.
Benefit of tax exemption
Tax exemption on Public Provident Fund (PPF) is available in the category of EEE. This means that the entire investment made in the scheme gets the benefit of tax exemption. There is no tax to be paid on the interest earned on the investment. The government revises the calculation of interest in PPF every three months. However, the interest is calculated annually. The most important thing about the PPF account is that it cannot be confiscated even in the event of any court order, debt or other liability.
Government guarantee on investment
PPF is regulated by the central government. The government also decides the interest in this. Therefore, there is a government guarantee on investment in the scheme. If you are looking for investment with tax exemption and good returns, then investing in PPF is the best. More returns than PPF are available only in Sukanya Samriddhi Yojana and Senior Citizen Scheme.
You can start investing in just Rs 500
Anyone can invest in PPF. This account can be opened in any post office or bank. Parents can also open an account on behalf of a minor. One can start with just Rs 500 to open and invest PPF account. To keep the account active, at least Rs 500 needs to be deposited in every financial year. A maximum of Rs 1.5 lakh can be invested annually in a financial year.
How much profit on how much investment every month?
| investment every month | how much money after 15 years | how much money after 20 years | how much money after 25 years |
| ₹12,500 | ₹39.82 lakh | ₹65.57 lakh | ₹1.02 Lakh |
| ₹10,000 | ₹ 31.85 lakh | ₹52.45 lakh | ₹81.76 lakh |
| ₹5,000 | ₹15.92 lakh | ₹26.23 lakh | ₹44.88 lakh |
| ₹3,000 | ₹9.55 lakh | ₹15.73 lakh | ₹24.52 lakh |
| ₹2000 | ₹6.37 Lakh | ₹10.49 lakh | ₹16.35 lakh |
| ₹1,000 | ₹3.18 lakh | ₹5.24 lakh | ₹ 8.17 lakh |
Get Rs 1.02 crore on maturity
If you want to make Rs 1 crore in PPF, then for this you will have to invest Rs 12,500 every month for 25 consecutive years. If you invest 10 thousand rupees a month, then after 25 years you will get about 81.76 lakh rupees.
Lock in period is 5 years
You cannot withdraw money in PPF account for 5 years after opening it. Because, a lock-in of 5 years has been kept. Withdrawal can be done after 5 years by filling Form 2. However, 1% will be deducted from the total corpus if the money is withdrawn before the age of 15 years.
Loan facility against PPF
Loan can also be taken against deposit in PPF account. The loan can be applied for on completion of one year of the financial year opening the PPF account. Are eligible to take loan from PPF till the end of 5th financial year. Suppose someone has opened a PPF account in January 2020, then you can take a loan from 1st April 2021 to 31st March 2022. You can take a maximum loan of 25% on the deposit. The loan can be taken at only 1% more interest than the interest available on PPF. Interest can be paid in two monthly installments or in lump sum.
