PPF- Invest in this Government tax free savings scheme


The Public Provident Fund, or PPF, was established by the Indian government in the past to help small savers who do not enjoy taking risks. It is among the most well-liked government-sponsored saving plans in India. The Exempt-Exempt-Exempt (EEE) feature of the PPF, which makes it completely tax-free, makes it one of the few programmes that offer the public a way to avoid taxes. PPF, which was first offered in 1968 by the National Savings Institute of the Ministry of Finance, has grown into a potent instrument for Indians that allows them to take advantage of tax advantages.

PPF now offers an interest rate of 7.1% per year, with interest computed monthly. According to the rules, investors may deposit funds into their PPF accounts for up to 15 years in succession. The PPF account’s tenure may be extended for as many years as necessary if the owner does not need the money at the conclusion of the 15-year period. A PPF Account Extension Form must be submitted in batches of five years to do this. PPF accounts allow for annual investments as low as Rs 500 and as high as Rs 1.5 lakh.

With its high popularity, low risk, and tax-free status, the PPF can also assist investors in building up as much as Rs 1 crore if they invest wisely. It also offers good interest rates. Investors must use the procedures described below to accomplish this.

Your PPF account would receive a monthly investment value of approximately Rs 12,500 if you contributed Rs 417 per day. This indicates that you are investing slightly more than Rs 1,50,000 per year, the maximum allowed, in your Public Provident Fund account. The total money accumulated in 15 years will be Rs 40.58 lakh; beyond that, the duration must be extended twice in blocks of five years each.

The amount you will receive upon maturity if you continue this behavior from the age of 25 until the age of 50, or over a period of 25 years, might reach Rs. 1.03 crore lakh. The total interest earned will be close to 66 lakh and will be completely tax-free. You would have invested about Rs 37 lakh in total over the course of 25 years. In keeping with this, it should be noted that because interest is computed monthly, the optimal time to deposit money is between the first and fifth of each month.

There is no need for you to invest such a large sum if you are unable to. PPF, or the Public Provident Fund, allows for diverse investing options because individuals can fund their accounts with as little as Rs. 500 annually.