Public Provident Fund Scheme Details: Everyone wants to make more profit with less investment, and the central government has made many schemes available to such people.
Among these schemes is a particularly lucrative, which allows you to invest less and get more money.
The Public Provident Fund Scheme offers the potential for more profit with less investment and the promise of a financially secure future.
Saving a portion of your earned money is essential for meeting future needs, so many people show interest in saving.
While investments in stocks, mutual funds, and other options can yield profits, they also carry high risks.
Government schemes are the best choice for those who want secure returns without risk, which is why many choose them.
The Public Provident Fund is one such guaranteed scheme, offering the potential for more profit with less investment.
For instance, if you invest Rs. 1500 per month in this scheme, you will have Rs. 5 lakhs at the end of the maturity period.
Experts say it’s a smart long-term strategy. The deposits in this scheme accrue attractive interest income and are backed by the central government’s security.
The income from this investment is not taxed, and the benefit of compound interest is also available.
Additionally, investments in PPF are tax-exempt under Section 80C of the Income Tax Act, making it a savvy financial move.
The PPF account allows you to invest between Rs. 500 per year and up to a maximum of Rs. 1.50 lakh. Its maturity period is 15 years. The investment tenure can be extended by up to five years, applying one year before maturity.
However, the account will be frozen unless the minimum investment of Rs. 500 is made in any one year within the 15 years. In addition to the post office, you can also open a PPF account in a bank.
Using an investment of Rs. 1500 per month as an example, if you invest like this for 15 years, a total of Rs. 2,70,000 will be deposited.
At the current interest rate of 7.1 percent, you will earn interest income of Rs. 2,18,185. If interest is added to the amount deposited, the total amount will be approximately Rs. 5 lakhs. The scheme can be extended for additional years to increase the income.
Similarly, if you invest Rs. 5,000 monthly in a PPF account, you will receive approximately Rs. 60,000 annually.
Over 15 years, this would amount to nearly Rs. 9 lakhs deposited, with an additional income of Rs. 7,27,284 in the form of interest and compound interest.
Combined, this would come to about Rs. 16.27 lakhs at maturity. If you extend your investment tenure to 25 years, your PPF value at maturity will reach around Rs. 42 lakh, with interest income exceeding Rs. 26 lakhs over this period.