PPF is a government guaranteed scheme in which you can start investing with just Rs 500..
Nowadays, everyone wants to invest their money in a safe and good return-giving scheme. So if you also want your hard-earned money to be safe and you can also get good interest on it, then Public Provident Fund (PPF) is a great option for this. PPF is a government-guaranteed scheme in which you can start investing with just Rs 500 and can invest a maximum of Rs 1.5 lakh every year.
The most special and surprising thing is that there is a way in PPF by which you can earn interest of up to ₹ 2.88 lakh without investing a single new penny. But the only condition is that you have invested regularly for 15 years.
What is the whole funda of investment?
Let us tell you that if you invest ₹ 1.5 lakh every year for 15 years in PPF, then a total of ₹ 22.5 lakh will be deposited. On this, you can get an interest of about ₹ 18.18 lakh at the rate of about 7.1% per annum, according to which your fund can grow to ₹ 40.68 lakh on maturity. But now the special thing is that this fund can be kept in PPF even further without adding a new amount, due to which interest of up to ₹ 2.88 lakh will be received every year. That is, by investing once, you can earn free annual income in the future, and that too completely tax-free.
By the way, if an investor has invested in PPF without stopping for 15 years and the scheme has matured, then it is not necessary that you withdraw the money immediately. You can increase this account even more without adding new money, which is called "PPF Extension Without Contribution". No application is required for this extension of PPF; if you do not withdraw the money, then this facility starts automatically. The good thing is that during this extended period, interest keeps getting added every year on the deposited amount, and you can withdraw the entire amount whenever you want.
How to get ₹2.88 lakh
If an investor deposits ₹1.5 lakh every year for 15 years in PPF, then a fund of about ₹40.68 lakh can be created on maturity. So now if you let this fund remain in the PPF account and do not add any new amount, then also this amount can earn about ₹2.88 lakh interest every year at 7.1% interest. Yes, this can be considered a way of earning without any hard work. As long as the money remains in the PPF account, interest can be earned on it. This is the reason why this scheme gives an opportunity to get great returns in the long term, even without investment.
Benefits of 5-5 year blocks
Yes, the PPF account can be extended after maturity, not only without investment, but also with investment. However, it is necessary that investors can request an extension through a form within one year of the account maturing. When extension with contribution is chosen, then the PPF account is extended directly for 5 years. The good thing is that you can avail of this facility as many times as you want - in blocks of 5 years each time. This is an excellent option for tax-free savings in the long term. (Note: This article is for information only and should not be considered as investment advice in any way; recommend consulting financial advisors for investment)
Disclaimer: This content has been sourced and edited from Zee Business. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.
