By Admin 
- PPF is best for those who want to make safe investments without any risk.
Benefits of Public Provident Fund: In today’s time, it has become very important for the common man to invest to secure his future. However, many people still do not understand where it would be good to invest. If you also want tax savings and good returns along with safe investment, then Public Provident Fund i.e. PPF can be a great option. This scheme has long been considered a reliable savings scheme among investors.
If we talk about the biggest feature of PPF, it provides the benefits of security, guaranteed returns and tax exemption. It comes in EEE i.e. Exempt-Exempt-Exempt category. This clearly means that the amount invested, the interest received on it and the amount received on maturity, all three are completely tax free.
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What is PPF scheme?
PPF is a long-term savings scheme, whose lock-in period is 15 years. In this scheme, the government reviews the interest rates every three months. At present 7.1 percent annual interest is being given on PPF. Investors can claim tax deduction up to Rs 1.5 lakh every year under Section 80C by investing in this scheme.
Know how much you will get by investing Rs 1.5 lakh every year?
If a person deposits Rs 1.5 lakh every year i.e. Rs 12,500 every month in PPF, then after 15 years he can get a huge fund.
Understand PPF calculation
- Annual investment – Rs 1 lakh 50 thousand
- Time – 15 years
- Interest rate – 7.1 percent per annum
- Total investment- Rs 22.5 lakh
- Estimated interest – Rs 18.18 lakh
- Maturity amount – Rs 40.68 lakh
That means after 15 years your interest can be more than 80 percent of your original investment. This is the advantage of compound interest, in which interest is also earned on interest.
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For whom is PPF better?
PPF is a good option for those who want a safe investment without risk. This is especially beneficial for working employees, those planning retirement and parents saving for their children’s education or future.