New Delhi:
When it comes to investing, there are plenty of options available nowadays. Investors often diversify their portfolios by investing in various schemes.
If you’re seeking guaranteed returns and a solid investment, consider the Public Provident Fund (PPF), backed by the government, requiring long-term investment.
The PPF scheme matures in 15 years, with the option to extend for an additional 5 years.
Annual deposits ranging from Rs 500 to Rs 1.5 lakh can be made, accruing a current interest rate of 7.1 percent.
It falls under the EEE category, offering tax savings on investment, interest, and maturity proceeds, making it an attractive option for many.
To participate, one can open a PPF account at any post office or government bank. Even a modest investment of Rs 1,000 per month can grow to over Rs 8 lakh in a few years, demonstrating its potential for substantial returns over time.
By consistently investing Rs 1,000 monthly for 25 years, totaling Rs 3,00,000, at a 7.1 percent interest rate, the accumulated interest alone amounts to Rs 5,24,641, resulting in a maturity value of Rs 8,24,641, showcasing the power of compounding.
The PPF falls under the EEE category, ensuring tax exemption on deposits, yearly interest earned, and the final maturity amount, providing a triple tax benefit to investors, enhancing overall returns.
Understanding the rules for extension is crucial. PPF accounts can be extended in 5-year blocks, offering two options: extension with contribution or without.
Opting for extension with contribution requires timely submission of an application, ideally within one year of maturity, and completion of the necessary form at the designated post office or bank branch.
Failure to adhere to these procedures may result in forfeiture of the extension privilege and the inability to contribute further to the account.
