The Public Provident Fund is one of the unsung heroes of wealth creation for the general public in India and that has held true for decades. However, it is not really promoted much, nor does it make its way into every day conversations. But it should be emphasised that it is one of the most important and investor-friendly tools for wealth creation. In fact, parents themselves should create PPF accounts for their children when they are very young and inculcate in them a habit of saving money.
Also, importantly, PPF is the safest investment. It will never give terrifying shocks to its account holders, the kind that the stock markets did recently. Notably, investors lost a horrible over Rs 17 lakh crore in the market crash last Monday. So, since PPF is shock-proof, so to speak, how to take the greatest advantage from it? Well, here is how you can take this high PPF interest rate of 7.1% by just investing Rs 5000 every month in order to create a massive fund of over Rs 41 lakh.
Notably, the PPF investment limit is Rs 150,000 in the fiscal. However, not everyone can take full advantage of this sum. In case you have Rs 5000 to invest every month, you can guarantee for yourself a massive windfall.
One more thing that a PPF investor needs to know is that the PPF account has a lock-in period of 15 years. However, it is recommended that even after that, the investor should continue the account. PPF account can be extended by a period of 5 years multiple times. In fact, for an indefinite period.
In case the investor increases the extended period twice, 5 years each time, the duration of investment becomes 25 years.
So, with an investment of Rs 5000 monthly, an interest rate of 7.1% and investment tenure of 25 years, the money that the investor will get is massive. When the PPF calculator does the exercise, it reveals the investor will get an amount of Rs 41,23,205.
And this can be achieved just by employing basic discipline and nothing more.
In case the duration of the investment is turned into 30 years, the sum rises even more sensationally. The investor will get Rs 61,80,364. It is clear that the sooner the investor starts his or her PPF investment journey the greater the windfall will be when it is time to retire.
PPF interest rate is a high 7.1%, which matches most bank fixed deposit rates nowadays. However, PPF is totally tax free. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
