The Public Provident Fund (PPF) is an investment option in India that offers guaranteed returns and fixed income. This tax-free investment is not market-linked and is open to all Indian citizens, who can open an account in a post office or bank. The maturity period is 15 years, but the investment can be extended, with returns accelerating. Upon maturity, investors have several options: withdraw the money, continue earning interest without withdrawing, or extend the investment for 5 more years.
Withdrawn money and interest are tax-free, with income tax exemption available on investments up to Rs 1.5 lakh annually. The PPF account can be opened in any government or private bank as well as post office branches. It can also be opened for a minor, with the parents holding it on their behalf until the minor turns 18.
The PPF currently offers a 7.1% interest rate, calculated annually and decided quarterly. If you invest Rs 5,000 a month for 15 years, the total investment will be Rs 9 lakh, with an interest of Rs 7.27 lakh, and a maturity amount of Rs 16.27 lakh. By extending the investment for 5 more years, the total investment will be Rs 12 lakh, with an interest of Rs 14.63 lakh, and a maturity amount of Rs 26.63 lakh.
Historically, the PPF has been a popular choice due to its tax-free status and guaranteed returns, making it a secure and reliable investment option for individuals looking to grow their wealth.
Leave a Reply