Public Provident Fund (PPF) is very famous among the people. One of the major reasons for this is the benefits available in this scheme. This scheme gives you the benefit of tax saving along with excellent interest rate.
There is an option to claim tax on deposits every year in this scheme. No tax has to be paid on the interest received every year. Also, once the account matures, the entire amount remains tax free.
For the investment of their money, many people invest it in Public Provident Fund (PPF). It is a long term investment plan. In this, along with a much better interest rate, you also get the benefit of tax saving. If you are planning for retirement then you can choose this scheme. Let us know why this scheme is better in terms of investment.
Why PPF is best for investment
Public Provident Fund (PPF) is very famous among the people. One of the major reasons for this is the benefits available in this scheme. This scheme gives you the benefit of tax saving along with excellent interest rate. There is an option to claim tax on deposits every year in this scheme. No tax has to be paid on the interest received every year. Also, once the account matures, the entire amount remains tax free.
This scheme is very good for these people
Any Indian citizen can invest under this scheme. An account can be opened under this scheme by visiting any bank or post office. At the same time, under the scheme, a minimum of Rs 500 and a maximum of Rs 1,50,000 can be invested in every financial year. Interest can be calculated annually. However, it is given on a quarterly basis. At present, the benefit of interest is being given on PPF at the rate of 7.1 per cent. The maturity period under the scheme is 15 years.
This scheme can make you a millionaire
PPF scheme can make you a millionaire. However, for this you have to keep investing continuously in it. If you are 25 years old and you invest Rs 1,50,000 in it every year, then at the beginning of the next financial year, you will get a benefit of Rs 10,650 as interest. In this scheme you get the benefit of compound interest. Accordingly, on completion of 15 years of maturity, Rs 40,68,209 will be deposited in your account. In this, Rs 18,18,209 will be included as your interest. You can also extend this account for 5-5 years.
Will become a millionaire at the age of 50
At the age of 50, if you extend your PPF account once for another 5 years and invest Rs 1,50,000 annually in it, then a total of Rs 1,03,08,014 will be deposited in your account. If you continue investing in this scheme for 35 years, you will get around Rs 2.5 crore at the time of retirement. The special thing is that you will not have to pay any tax on this.
