Looking to make a lot of money in the safest manner possible, but don’t have the time, or the knowledge, to actively manage your money? Want to take advantage of income tax deductions allowed on it too? Then the Public Provident Fund (PPF) is just what the doctor ordered for you. Notably, PPF interest rate is a high 7.1% and it can easily generate Rs 13,56,070 from your Rs 50000 investment.
PPF safety:
Notably, the PPF interest rate and the money itself is guaranteed by the government. Therefore, the chances of anything going wrong are negligible.
How to turn Rs 50000 into Rs13,56,070?
Let us start with the investor contributing Rs 50000 every year to his PPF account. The PPF investor must not withdraw any funds from his account at any time during the tenure of his investment.
The money is invested for a period of 15 years. The lockin period is that much although withdrawals can happen after a certain period has elapsed.
The PPF interest rate implemented is a high 7.1%. It was even higher a few years earlier, but the government reduced it. Investors should, therefore, make sure they are not impacted by a sudden reduction in the interest rate by the government sometime in the future. As such, they should keep a close watch on the rate of interest.
Once PPF maturity is reached after 15 years, the investor will receive a grand sum of Rs 13,56,070.
The PPF investor had contributed just Rs 750000 in the 15 years of the scheme.
And he earned a whopping Rs 606070 in the form of interest alone. This is courtesy the compounding of interest.
And the best part is, the investor does not have to pay income tax at any stage of the scheme, not even at withdrawal.
Note: The sums mentioned here are estimations and the real amounts will be available on the investor’s PPF passbook.
Looking to make a lot of money in the safest manner possible, but don’t have the time, or the knowledge, to actively manage your money? Then check out PPF and the high interest rate it offers. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
