PPF Update: Public Provident Fund or PPF is one of the most popular, long-term investment options in India. It is a government-backed, high-yield, small savings scheme that aims to create long-term wealth for investors after retirement. Introduced in 1968 by the National Savings Institute of the Ministry of Finance, PPF has become a powerful tool for Indians in which they can enjoy tax benefits. The scheme has emerged as one of the most sought-after investment options owing to its safety, returns and tax benefits. It is a 100% risk free investment as this fund is backed by the Government of India, and does not move in line with the stock exchange rates which keep on changing from day to day.
How to get maximum benefit from your PPF account?
As per the guidelines, investors can invest their money in their PPF account for 15 consecutive years. However, if one does not need the money at the end of 15 years, one can extend the tenure of the PPF account by as many years as needed. This can be done in blocks of five years by submitting the PPF account extension form. Being one of the very few schemes that come under the purview of EEE rule, it is advised that investors keep money in their PPF accounts, even if they do not contribute anything, to earn maximum benefits even under tax rules. for.
The interest rate of PPF, which is currently fixed at 7.1 per cent, is the highest among fixed income products, which are backed by the government. So, if you invest Rs 1.5 lakh annually for 15 years, you get around Rs 41 lakh at maturity.
Invest Rs 250 per day, get Rs 62 lakh from PPF
If you invest Rs 250 per day in your PPF account, the monthly investment value comes to around Rs 7,500. This means that you are investing a little more than Rs 91,000 in your Public Provident Fund account every year. If you keep doing this from the age of 25 to the age of 50, that is, for 25 years, then the amount you will get during maturity will be Rs 62.5 lakh. This amount will be completely tax free and the total interest earned will be around 40 lakhs. The total amount you would have deposited in 25 years would be Rs 22.75 lakh.
However, if you cannot invest such a large amount, then you have no mandate. Public Provident Fund is flexible in nature in terms of investment as individuals can invest as little as Rs 500 per year in their accounts. PPF accounts can be opened online or one can also visit their banks to open the account.
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