The current PPF interest rate is as high as 7.10%. While it may not compare favourably with those offered by investment tools like mutual funds, it is definitely the safest. In fact, it would be hard to find a money-making scheme that offers more interest rate than PPF and is completely safe at the same time. There is the Employees’ Provident Fund (EPF) with interest rate of 8.25%, but not everyone is eligible for that. And the best part is that you just don’t have to bother too much with PPF. All you have to do is land up at the bank and pay the contribution on a regular basis. The totally uncomplicated nature of the Public Provident Fund makes it one of the best tools to create wealth for everyone. In comparison, the EPF is the most complicated tool when it comes to getting back your money after retirement.
However, do remember that PPF has a lock-in period of 15 years. And there is a penalty if you do not pay a minimum of Rs 500 every year. We suggest that the contributions must not be stopped and in fact, these should be increased as much as possible by the PF account holder. The maximum that a PF investor can contribute is Rs 150000 every year and full advantage should be taken of this.
In fact, one PPF trick that everyone should adopt is to make the contribution of Rs 1.5 lakh right in the first week of April every year. That way they will get the maximum returns. But, that is not always possible for everyone and depends on their current financial situation.
And now, let us see how to get your Rs 4000 to turn into lakhs. The assumption is that the PPF contribution will be Rs 4000 every month and that the tenure will stretch, in a continuous manner for 15 years. The PPF calculator shows that on maturity, the PPF account holder would have accumulated a sum of Rs 12,62,273. The exciting part here is as shown by the PPF calculator, the PF contributor paid just Rs 7,20,000 and he received as much as Rs 5,42,273 as interest.
Check PPF interest rate table below:
PPF details
Amount
Total Maturity Amount
Rs 12,62,273
Total Contribution
Rs 7,20,000
Total Interest Earned
Rs 5,42,273
PPF Interest Rate
7.10%
PPF Lock-in Period
15 years
After the 15-year period is over, the PPF account holder can withdraw the money or better still, extend the account tenure by a block of 5 years. This can be done indefinitely. And that means, the contributor will give the compounding formula an even greater time to work its magic.
Note: The amounts mentioned here are estimates and the exact returns coming to the contributor will be mentioned in the PPF passbook.
PPF interest rate being offered currently is 7.1% and it can create a big amount on a contribution of Rs 4000. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
