Post office scheme
Everyone wants some part of their hard earned money to be invested in a safe place, so that a good fund can be prepared in future. In such a situation, the Public Provident Fund (PPF) scheme of the post office is considered a great option. This scheme is especially for those who want tax free returns at low risk and make the savings strong in the long term.
The PPF scheme is run by the government, which keeps the investment in it completely safe. Investing in this is also good interest and there is no tax on the amount received on maturity.
Investing up to ₹ 1.5 lakh every year is possible
You can open a PPF account in any post office or bank. If you invest the maximum limit of ₹ 1,50,000 every year, then you get strong returns. This scheme comes with a 15-year lock-in period, but after maturity it can be extended for every 5 years.
7.1% annual interest, that is also tax free
The government is currently paying 7.1% annual interest on this scheme, which is reviewed every quarter. The special thing is that this interest is completely tax free. This means that the money you invest, the interest and maturity on it does not have to pay any tax on all three. It is kept in the EEE category i.e. rebate on investment, interest and maturity.
This is how funds of ₹ 40 lakh will be ready
Now the question comes, how will a fund of 40 lakh rupees be made? Suppose you invested ₹ 1.5 lakh every year. That is, if you save ₹ 12,500 every month, then your total investment will be ₹ 22,50,000 by the end of 15 years. It will get a guarantee of about ₹ 18,18,209 according to 7.1% interest. In this way, you will get a total of ₹ 40,68,209 on maturity.
Loan and partial withdrawal facility
Another special thing about PPF is that you can also take a loan if needed. Loan facility is available from third year of opening from the third year. Apart from this, when your account is 5 years, you can also withdraw some amount. That is, if you open an account in 2020-21, then in 2026-27 you will be entitled to partial withdrawal.