The benefits of investing in Public Provident Fund (PPF) are told by the banks and post offices themselves. Good interest (PPF Interest), tax free investment, the money received on maturity (PPF Maturity) is completely yours.
The Public Provident Fund (PPF) scheme is the best. Any citizen of India can invest in it. The biggest thing is that the benefits received in it remain everyone’s choice. The benefits of investing in PPF are told by the banks and post offices themselves. Good interest (PPF Interest), tax free investment, the money received on maturity (PPF Maturity) is completely yours. It is an excellent tool from the investment point of view. The maturity period is 15 years. But, you can give extension to the investment even after 15 years. If you give extension, then your return will become rocket and the initial investment of Rs 5000 will become more than 26 lakhs.
PPF: These 3 tricks can make you rich
At the time of maturity, you get 3 options. It is very important to understand these 3 options. First, withdraw your money after maturity. Second, even if you do not withdraw, you will keep getting interest. Third, you can give an extension for 5 years with new investment. Let’s understand how and what to do.
1. Withdraw the entire money on maturity
Withdraw the amount deposited by you and the interest on the maturity of the PPF account. In case of account closure, the entire amount will be transferred to your account. The money and interest received on maturity will be completely tax free. Apart from this, income tax exemption is available on investment up to 1.5 lakh every year. You will not have to pay any tax on whatever money you have deposited during the entire tenure.
2. Increase PPF investment for 5 years
The second option is to increase the investment after maturity. The scheme gives the option of account extension in tenures of 5 years each. However, if you want an extension for the next 5 years, you will have to inform the bank or post office 1 year before the maturity of the PPF account. The good thing is that the rule of pre-mature withdrawal does not apply at the time of extension and you can withdraw money anytime.
3. Extend the scheme without investment even after maturity
The third option in PPF account, even if you do not choose both the above options, the account will continue after maturity. There will be no need for new investment in this. The maturity will automatically increase for 5 years. But, the biggest advantage will be that you will continue to get interest on the deposited amount during this entire period. After this, it can be extended again in the same way after completion of 5 years.
Where can you open a PPF account?
PPF account can be opened in any government or private bank. Apart from this, you can also open an account in any post office branch of your city. There is also an option to open an account for a minor. However, the parents’ holding on behalf of the minor remains for 18 years. According to the rules of the Finance Ministry, a Hindu Undivided Family (HUF) cannot open a PPF account.
PPF Calculator: How will ₹5000 become 26.63 lakh rupees?
Currently, 7.1% interest is being given in the Public Provident Fund. The interest is calculated annually. But, it is decided on a quarterly basis. There has been no change in its interest rates for a long time. Let us assume that if you invest at the same interest rate for 15 or 20 years, then a large corpus will be created at different amounts. You can see the calculation below.
