A very high PPF interest rate of 7.1% can turn the small amounts that you invest into a virtual gold mine. In fact, if you invest Rs 12000 on a monthly basis, you can earn in excess of Rs 98 lakh! It is very much doable and all you need to do is keep faith in your PPF account and diligently invest this amount month-after-month and year-after-year without any break. Also, do not withdraw any money from your PPF account for any frivolous reason.
Notably, the Public Provident Fund is one of the best investment opportunities for everyone. Those who do not have it, should check immediately if they really should go and open one in their name. Among the benefits is that, under Section 80C, the investor will not have to pay any income tax on his PPF investment. It is not taxable at all. The other big benefit it carries is that it is a simple investment tool. It is very easy to understand and there are no complications, unlike the Employees’ Provident Fund (EPF) that involves so much red tape that subscribers have to run from pillar to post to try and get it organised, making withdrawal after retirement a nightmarish process.
How will this 7.1% PPF interest rate generate over Rs 98 lakh on a monthly investment of Rs 12000? The secret lies in the tenure. A PPF account reaches maturity after 15 years. However, to really get the benefit of the magic of compounding, a PPF account holder should extend the tenure by a batch of 5 years. That means, the PPF tenure has been extended from 15 years to 25 years. Now, the PPF calculator indicates that the sum on maturity for this person will be a massive Rs 98,95,694.37!
One thing that needs to be kept in mind is that the PPF interest rate is 7.1% currently, but is subject to change going forward as per directions of the government.
Note: The sums mentioned are estimations and the actual amounts will be available in the PPF passbook.
The PPF interest rate of 7.1% shows that massive sums of money can be generated even from small amounts by investors. Check what the PPF calculator shows. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
