New Delhi: One such investment option is Public Provident Fund (PPF). PPF is one of the most attractive investment options for risk averse investors. Also, it is well-liked by investors looking to save money for long-term goals.
You can also save monthly money in PPF and get around Rs 1 crore at the time of maturity. Let’s know how?
PPF interest rate and maturity
Currently, PPF pays an interest rate of 7.1 per cent annually and the interest is calculated on a monthly basis. As per the guideline, 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 for as many years as needed. This PPF account can be done in blocks of five years. Investors can invest a minimum of Rs 500 per annum and a maximum of Rs 1.5 lakh per annum in their PPF accounts.
Can save tax
PPF currently gives guaranteed returns. As per the rules of PPF, investment up to Rs 1.5 lakh in it every year is eligible for tax deduction under section 80C of the Income Tax Act 1961.
Explain that it gives higher returns as compared to other fixed investment plans. The PPF interest rate is revised every quarter by the government. Currently, the government is offering returns at 7.1% per annum interest rate for all investments made under PPF schemes.
On maturity you will get Rs 1 crore
If you invest wisely in PPF and you invest a few thousand rupees every month, then at the time of maturity you can earn 1 crore rupees. For this you have to invest 1.5 lakh rupees every year.
That is, Rs 12,500 per month. That is, Rs 417 will have to be deposited every day. After 15 years of investment, when your plan matures, you will get around Rs 40 lakhs at 7.1% interest rate.
However, investors have the option to extend the PPF account in blocks of 5 years after the completion of the mandatory maturity period of 15 years.
Therefore, investing Rs 1.5 lakh every year for 20 years in a PPF account will create a corpus of around Rs 66 lakh. If you continue to invest Rs 1.5 lakh per annum for the next five years, your PPF balance will reach around Rs 1 crore in 25 years.
