PPF Account: The Public Provident Fund (PPF) is an excellent long-term investment plan that offers great benefits for investors. It provides a wonderful opportunity for employees to build a substantial corpus for their retirement.
According to the rules of PPF, investors can start investing in their PPF account with a minimum amount of just Rs 100. The account can be opened at a nearby bank or post office. It’s worth mentioning that consistent investments in PPF can lead to becoming a millionaire by the time of maturity. Let’s explore this possibility in more detail.
Learn About the Rules of PPF Account
To have a PPF account, you need to invest a minimum of Rs 500 in it. The investment period for this scheme is 15 years. Under this scheme, an individual can either deposit periodically throughout the financial year or invest a maximum of Rs 1.50 lakh per year.
Benefits of Having a PPF Account
The PPF account follows the EEE (Exempt, Exempt, Exempt) rule. This means that if a person invests Rs 1.5 lakh in a year, they can avail tax exemption. Additionally, tax exemption is also available on the maturity amount. The PPF account offers an interest rate of 1.7 percent, which is credited quarterly. The maturity period of the PPF account is 15 years. However, investors can choose to continue with the PPF account without withdrawing the funds upon maturity. They have the option to extend the PPF account for an additional 5 years. By depositing Rs 417 daily, one can create a substantial fund.
Discover How to Get Lakhs of Funds
Suppose you start investing in a PPF account at the age of 30 and increase your contributions threefold. In this scenario, you can invest in the PPF account for 30 years. If the investor deposits Rs 1.50 lakh annually in the PPF account, the total interest earned after 30 years of investment would amount to approximately Rs 1.54 crore. This calculation is based on an assumed interest rate of 7.10 percent.