New Delhi: Public Provident Fund (PPF) is one of the very popular long-term investment schemes in India. The PPF scheme helps money grow with an interest rate of 7.10 per cent (returns can vary if the centre announces new interest rates). Disciplined investment ensures a massive wealth accumulation over a period of time (at least 15 years) as it is not just the high-interest rate, but the depositor should also take note of the benefits of compounding.
If an individual wants to become a crorepati and earn around Rs 2 crore in PPF by the time the person turns 60, then the most important factor for investment is – one has to give it time, start as early as possible and ensure investing month after month without a break. It may be recalled that the PF interest rate in 2000 was 12 per cent. However, since then various governments at the Centre have reduced.
If a 20-year-old starts investing Rs 10000 monthly in his PPF account and continues doing so for as long as 40 years, the PPF calculator mentions that the beneficiary will be entitled to get a huge amount of Rs 2,63,27,728 (figure calculated with 7.1% interest rate).
PPF withdrawal, loan guidelines
- As per the existing rules, the minimum PPF deposit is Rs 500 and the maximum is Rs 1,50,000 in a financial year.
- PPF account holders can apply for loan. However, they cannot apply for loan from the beginning.
- PPF withdrawal is permissible from 6th financial year. Note, the entire sum cannot be withdrawn.
- A PPF account matures on completion of fifteen complete financial years. The account can be extended for any number for a block of 5 years with further deposits.
- PPF account holders are eligible for getting tax rebate. Deposit qualifies for deduction under Sec.80-C of IT Act. The interest earned in the account is free from Income Tax under Section -10 of IT Act.
A Public Provident Fund (PPF) account offers a compelling long-term investment opportunity in India, with a current interest rate of 7.10%. This article explores how early and consistent monthly investments can lead to substantial wealth accumulation, potentially reaching crores of rupees by retirement. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
