There are many options available in the investment sector, but among them, PPF scheme is considered a very safe method. Because this is a government scheme and market movements have no direct impact on it. Therefore, the money of those who invest in it keeps increasing with fixed returns. If you deposit Rs 7,000 every month, a huge fund of around Rs 57.72 lakh can be created on maturity. Let us understand its interest and calculation in simple language.
What is PPF scheme?
PPF is a government and safe long-term savings scheme, which offers good interest and tax relief. The money given in this is completely safe and the return on it is also fixed. PPF has a lock-in period of 15 years and is a better option for long-term goals like retirement, children’s education or marriage. This is a scheme guaranteed by the Government of India, in which the interest rate is changed from time to time. At present 7.1% annual interest is being given on PPF. Its biggest feature is that the money remains completely safe and tax benefits are also available.
How will a big fund be created?
If a person deposits Rs 7,000 every month i.e. Rs 84,000 in a year in PPF, then in 15 years this amount increases to about Rs 20 lakh. But if the investor runs this scheme for 25 years, then the wonders of compounding are visible and this money increases to about Rs 57.72 lakh.
This scheme is special for those who want to secure their future. PPF is a reliable option for working people, small businessmen or those who do not want to take risk. By investing a small amount every month, they can create a big fund for their children’s education, marriage or retirement. Another advantage of PPF is that investments in it get tax exemption under Section 80C. Also, the entire amount received on maturity is completely tax-free. That means the investor gets the benefit of tax savings along with safe returns.
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