New Delhi. If you are looking for a better investment where there is no risk of any kind, then Public Provident Fund (PPF) can prove to be a great option for you. There is absolutely no risk in investing in PPF. The reason for this is that it is fully protected from the government. You can also get good profits by investing in it. You just need to invest carefully.
Better returns can be obtained from PPF by investing over a long period of time. By depositing only Rs 1000 every month, you can get more than Rs 12 lakh.
What is the rate of interest?
The central government changes the interest rate on the PPF account every quarter. The interest rate is usually 7 percent to 8 percent, which may increase or decrease slightly depending on the economic situation. At present, the interest rate is 7.1 percent, which is compounded annually. This is more than the fixed deposits of many banks.
How much will you have to invest?
You can invest a minimum of Rs 500 and a maximum of Rs 1.5 lakh every year in a PPF account. Its maturity period is 15 years. After this, you can withdraw this money or you can carry it forward every 5 years.
Understand the complete calculation,
if you deposit Rs 1000 every month in PPF account, then in 15 years your investment amount will be Rs 1.80 lakh. An interest of Rs 1.45 lakh will be available on this. That is, after maturity, you will get a total of Rs 3.25 lakh. Now if you extend the PPF account for 5 more years and continue investing Rs 1000 every month, then your total investment amount will be Rs 2.40 lakh. Interest of Rs 2.92 lakh will be available on this amount. In this way after maturity you will get Rs 5.32 lakh.
If you extend it thrice for 5 5 years after the maturity period of 15 years (total thirty years) and continue to invest Rs 1000 every month then the total amount invested by you will become Rs 3.60 lakhs . 8.76 lakh will get interest on this. In this way, a total of Rs 12.36 lakh will be available on maturity.
Loan facility is also available,
if you have invested in PPF, then there is also the facility of taking loan on this account. But to take advantage of this, it will be available in the third or sixth year of account opening. On completion of 6 years of PPF account, you can also withdraw a small amount.
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