Post Office runs various saving schemes for children, old or young, which are risk free and excellent in terms of returns. By investing regularly in these, investors can get a huge fund on maturity.
Everyone wants to invest a part of their income while saving it in a place where their money is safe and they get good returns. In this case, all the schemes run by the post office are quite popular and give good returns. One such scheme is the Public Provident Fund (PPF), which is most popular among those investors who are looking for low-risk tax-free investment returns. While it gives more than 7 percent interest on investment, a good fund is also accumulated by regular investment.
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7.1% interest, 15 years lock-in
Under the Public Provident Fund (PPF), the government is giving 7.1% annual tax-free interest to the investors . In such a situation, this government scheme proves to be a profitable deal for those in the high tax bracket. Investment in PPF encourages disciplined savings with tax-deductible contributions under 80C. It claims EEE (exempt-exempt-exempt), which simply means that the contribution made by you to the scheme is also tax free, the interest received on the investment is also tax free and the amount received on maturity will also be tax free. The lock-in period in this scheme is 15 years.
You can start investing from Rs 500.
The Government of India itself guarantees security of investment in the Post Office PPF scheme and one can start with an investment of just Rs 500. A maximum lump sum investment of Rs 1,50,000 can be made in the PPF scheme in a financial year. The special thing about this government scheme is that if you want to continue investing even after the lock-in period of 15 years, then you can extend it for every 5 years.
This is how you can raise a fund of Rs 40 lakh.
Now let us tell you how investors can raise a fund of more than Rs 40 lakh through this scheme in 15 years of maturity. So suppose you invest a maximum of Rs 1.5 lakh in this every financial year. So according to this, you will have to save Rs 12,500 from your income every month. If you pay it regularly every year for 15 years, then your total deposit will be Rs 22,50,000 at an interest rate of 7.1 percent. At the same time, you will get a guaranteed return of Rs 18,18,209. Meaning your total investment will become Rs 40,68,209 in this maturity period. You can increase or decrease the investment amount according to your convenience.
Facility of early withdrawal with loan
Under the PPF scheme, the account can be opened in any post office or bank. It also provides the facility of loan on investment and one can apply for the loan after the end of the financial year in which the initial investment was made. Not only this, the facility of withdrawal from the account is also available after five years of opening the account in PPF account. For example, if you have opened the account in 2020-21, then withdrawal can be done after 2026-27.
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