Public Provident Fund: PPF i.e. Post Office Public Provident Fund is a long term savings scheme given by the government. Along with guaranteed returns, it also offers tax benefits under Section 80C of the Income Tax Act, 1961. Besides, the entire amount received on maturity is also tax free. This is a government scheme which gives guaranteed returns in the long term. Let us know how much you can earn in 18 years by investing Rs 5,000-10,000 every month so that you can make financial planning from now to secure your future.
Who can invest in PPF?
Anyone can invest in PPF – salaried class, businessmen or pensioners can open a PPF account. If someone is a minor, then in this situation his parents or legal guardian can open his PPF account. In the absence of parents, grandparents can start investing in PPF in the name of their grandchildren as legal guardians. Overall, any resident of India can invest in PPF. NRIs (Non-Resident Indians) cannot open PPF account.
How much amount should I start investing with?
The minimum amount of investment in PPF is Rs 500, that is, you can open your PPF account by depositing Rs 500. Whereas a maximum investment of Rs 1.5 lakh can be made. Its lock-in period is 15 years, after which if you want, you can extend it with an unlimited block of 5 years each.
On maturity, fill the account closing form and submit it along with your passbook and withdraw your share of the money. If you want, you can leave the maturity amount in your account and earn interest on it. You will be allowed to withdraw from PF account once in a year. In case of emergency, if you need money, you can withdraw up to 50 percent of the balance at the end of every fourth year.
Now let us know that if you deposit Rs 5000, Rs 7000 or Rs 10000 every month in your PF account for a period of 18 years, then how much will be deposited with you. Here we are calculating according to 7.1 percent interest rate.
How much will you get on an investment of Rs 5000?
An investment of Rs 5000 for 12 months means Rs 60000 are being deposited in the PF account annually. The investment amount in 18 years will be Rs 10,80,000, while the interest earned on it will be Rs 11,25,878. That means your maturity amount will be Rs 22,05,878.
How much will you deposit on an investment of Rs 7000?
By investing Rs 7000 every month in PF account, the annual investment (7000×12) will become Rs 84000. That means, in 18 years, the amount of your investment in PF account will be Rs 15,12,000, while the interest received on it will be Rs 15,76,230. According to this, the estimated maturity amount will be Rs 30,88,230.
How much money will you get on an investment of Rs 10000?
If you keep depositing Rs 10,000 in your PF account every month, your annual investment will be Rs 1,20,000 (10,000×12). In this way, in 18 years your deposit amount will increase to Rs 21,60,000 and you will get Rs 22,51,757 as interest on it. That is, on maturity you will get Rs 44,11,757.
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