In the era of inflation, it is becoming very difficult for people to save for the future by running their daily expenses. The Public Provident Fund (PPF) scheme of the post office can prove to be the best for you to meet your long term goals and increase your savings.
This scheme not only gives a safe savings option, but you can also become a millionaire by saving in it. Currently it is getting 7.1% interest. We are telling you about it in detail…
Starting with a minimum amount of Rs.500
PPF account can be opened with as little as Rs 500 only. You can deposit up to a maximum of Rs 1.5 lakh annually in your PPF account.
Maturity amount of ₹40 lakh on savings of ₹12,500
If you deposit Rs 12,500 in your PPF account every month, you will get a total of Rs 40.68 lakh on maturity. PPF account matures in 15 years. However, after maturity, you can also extend it for 5-5 years. That is, you can invest in this scheme for a total of 25 years. You can withdraw your money from it after 15, 20 or 25 years.
Can’t withdraw money for 5 years
However, you cannot withdraw your money for the next 5 years from the year of opening the PPF account. After completion of 5 years money can be withdrawn by filling Form 2. However, if you withdraw money before 15 years, you will have to pay a penalty of 1%.
Who can open PPF account?
Any person can open this account in his name in any post office or bank. Apart from this, the account can also be opened by any other person on behalf of the minor.
Where can open PPF account?
You can open your PPF account in any bank or post office. You can open it for your child in your name. However, a PPF account cannot be opened in the name of a Hindu Undivided Family.
How to get 1 crore rupees
If you want to become a millionaire through PPF savings, then you have to deposit Rs 12,500 every month for 25 years. In this, at the current interest rate of 7.1% per annum, you can get a maturity amount of Rs 1.03 crore by depositing a total of Rs 37.50 lakh with an interest of Rs 65.58 lakh.
Totally tax free and risk free
PPF comes under the category of EEE, which means you get tax exemption on the entire amount deposited in the scheme. Also, there is no tax on the interest and maturity amount received from the investment. The rate of interest available on PPF investment is revised every three months. PPF money cannot be confiscated or recovered in the form of any penalty or liability.
How much return on monthly investment
| Investment every month | How much will you get after 15 years | How much will you get after 20 years | How much will you get after 25 years |
|---|---|---|---|
| 1000 | 3.18 | 5.24 | 8.17 |
| 2000 | 6.37 | 10.49 | 16.35 |
| 3000 | 9.55 | 15.73 | 24.52 |
| 5000 | 15.92 | 26.23 | 44.88 |
| 10,000 | 31.85 | 52.45 | 81.76 |
| 12,500 | 39.82 | 65.57 | ₹1.02 crore |
Note: This table is given according to a rough estimate because the interest received on PF is reviewed every 3 months. Apart from this, in the table mentioned here, the interest has been calculated on an annual basis.
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