PPF scheme: The Public Provident Fund (PPF) scheme is a profitable investment opportunity that could ultimately aid in your significant wealth accumulation. It offers the safety of a government guarantee, alluring returns, and income that is not subject to taxes.
Many people want a better return and a risk-free investment option when it comes to making investments. Public Provident Fund (PPF), though there are many such instruments, such as fixed deposits, is one such program. PPF is a government-backed savings program that promises investors returns at maturity. Because it provides income tax exemptions under Section 80C of the Income Tax Act of 1961, the PPF is another well-liked choice. One thing to keep in mind when investing in PPF is that the maximum tenure is 15 years and the maximum investment cap is Rs 1.5 lakh per year. As a result, it needs to be renewed after 15 years.
The government is offering a return of 7.1 per cent on PPF. The PPF interest rate is subject to change every quarter as per the government’s directive. However, given the past trends, it can be expected that the rates will remain around this or a bit higher in the coming years. Here is a breakdown of how you can deposit Rs 5,000 each month and increase your PPF investment to over Rs 1 crore.
Opening a PPF Account
You must make a minimum initial investment of Rs 500 to begin your PPF journey. A PPF account is simple to open at the nearby post office or bank. The government will start offering an alluring interest rate of 7.1% for this program on January 1, 2023, and the maturity period is set at 15 years. Additionally, you have the choice to decide whether to keep making contributions and to extend your account in five-year increments. You can also request a loan against your PPF account after five years.
The Power of PPF for Long-Term Investment
The PPF scheme is renowned for its long-term investment benefits. You can contribute up to Rs 1.5 lakh annually, and your money benefits from compound interest while remaining unaffected by market fluctuations.
How to Reach Rs 42 Lakh in PPF
Your annual investment would be Rs 60,000 if you consistently put aside Rs 5,000 in a PPF account each month. Your maturity amount would be Rs 16,27,284 after 15 years. However, by increasing your monthly deposits at predetermined intervals, you can significantly increase your wealth.
For instance, your total investment would be Rs 15,12,500 and your interest income would increase to Rs 26,45,066 if you increased your monthly deposit to Rs 10,000 after 15 years. Your total fund will be around Rs 42 lakhs (Rs 41,57,566) after 25 years.
If you opt for a more aggressive approach and deposit Rs 12,500 every month, you can even amass Rs 1 crore after 25 years.
Investing in a PPF scheme is a smart choice for long-term financial security. With disciplined contributions, you can watch your wealth grow and achieve your financial goals, whether it’s Rs 42 lakhs or even Rs 1 crore.
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