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Public Provident Fund: If you are looking for safe investment and big return without any risk, here is one such wonderful investment plan for you. Called as Public Provident Fund, if you invest even Rs 1,000 a month in in the scheme, it will give you lakhs of rupees in return in the long term.
If you could plan to invest at an early age, you would be in a better position to reap a good return. Also, you must carry out your investment in a disciplined manner.
This PPF scheme was introduced by the National Savings Organization in 1968 and it aimed at making small savings a lucrative investment option. If you choose your tenure plan in the scheme wisely, PPF in the long term will yield very good returns.
Public Provident Fund: Interest rate
At present, Public Provident Fund offers an interest rate of 7.1 percent. A minimum of Rs 500 and a maximum of Rs 1.5 lakh per annum can be deposited per annum in this PPF account. Deposits can be done maximum in 12 transactions.
The investors must note that the PPF account matures in 15 years, after which you can either withdraw all your money or extend the PPF account for a block of 5 years each.
In this PPF scheme, the interest amount is compounded on an annual basis. When you keep investing in any scheme for a long time, then there is also a tremendous benefit of compounding on it.
Public Provident Fund: How much one can invest
One can invest a maximum of Rs 1.50 lakh in a PPF account in a year. Suppose, you invest Rs 10,000 every month in a PPF account. And then after maturity in 15 years, you can extend your PPF account in blocks of 5-5 years. In such a situation, after 30 years, the entire fund of your PPF account will be more than 1 crore (Rs 1,23,60,728). In this, your investment will be Rs 36 lakhs and interest income will be around Rs 87.60 lakhs.The investors must note that the calculation takes 7.1 percent annual interest for the next 5-5 years after the maturity of the entire investment period that is 15 years. The interest rates are reviewed by the government every quarter. In such a situation, the maturity amount can fluctuate with the change in interest rates.
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