New Delhi: The Public Provident Fund (PPF) is a favored long-term investment tool in India, designed to offer financial security and tax advantages while encouraging disciplined savings. To understand its benefits more concretely, let’s examine a specific example of how investing in a PPF account can yield significant returns.
Imagine an individual who decides to invest Rs 10000 every month into a PPF account over a 15-year period, with an annual interest rate of 7.10%. Over this investment duration, the total amount deposited would be Rs 31,55,680. By the end of the 15 years, the PPF account would accumulate a maturity amount of ₹13,55,680. This amount reflects not only the principal but also the interest earned over the investment period. The total interest accrued in this example would be Rs 13,55,680.
This example vividly demonstrates the PPF’s potential for substantial growth. The consistent monthly deposits, coupled with the compound interest at a rate of 7.10%, illustrate how the PPF can transform relatively modest regular investments into a significant corpus over time.
Beyond the attractive returns, the PPF account offers additional benefits that enhance its appeal. It provides a loan facility from the 3rd to the 6th financial year, which can be a valuable resource in times of need. Withdrawals are permitted from the 7th financial year, offering flexibility for unforeseen expenses. Moreover, the account enjoys robust legal protection, as the invested amount is not subject to attachment under any court order or decree.
Tax advantages further bolster the PPF’s attractiveness. Deposits qualify for deductions under Section 80-C of the Income Tax Act, while the interest earned is exempt from tax under Section 10, making it a powerful tool for both savings and tax planning.
In summary, the PPF account stands out as a secure and tax-efficient investment vehicle. The example of a Rs 10000 monthly investment growing to a maturity amount of over Rs 31 lakh highlights the account’s potential to deliver impressive returns while providing additional financial and tax benefits.
Discover how investing just Rs 10000 monthly into a Public Provident Fund (PPF) can grow to Rs 31,55,680 over 15 years. This powerful example illustrates the benefits of disciplined saving and the advantages of PPF’s attractive interest rates. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
