Post office saving scheme
Every person wants some part of his earnings to be saved and he should invest somewhere where his money is safe and good returns are also received. In such a situation, PPF Scheme of Post Office can be a very reliable option for you.
This scheme is especially for those who want to get tax free returns without taking more risk. Let us know what this scheme is special and how you can make a big fund of up to Rs 40 lakh with monthly savings.
Interest and lock-in period
The government gets a tax free interest of 7.1% every year on public provident funds. That is, you will neither have to pay any tax on this nor will any tax be deducted on the amount received. This scheme has a 15-year lock-in period for investment. If you want, after 15 years you can extend it forward for every 5 years.
How will 40 lakh rupees be made in 15 years?
If you deposit Rs 1.5 lakh every year or Rs 12,500 every month and the interest rate is 7.1%, then at the end of 15 years your total investment will be Rs 22.5 lakh. But with interest, this amount will increase to about 40.7 lakh rupees.
How to start and how much can you invest?
Investment in PPF scheme can be started from just Rs 500. You can invest up to a maximum of Rs 1.5 lakh annually. If you want, you can also deposit it in small installments every month. Meaning that if you save Rs 12,500 every month, then an investment of Rs 1.5 lakh will be done throughout the year. You can easily open a PPF account in any post office or bank. This gives you the security of the government and your money is safe.
Facility to withdraw money from loan and account
A major feature of the PPF scheme is that you can withdraw some amount from your account after the fifth year. Meaning that even in the middle of the 15-year lock-in period, you can withdraw the necessary money, then you can withdraw. Also, after the third financial year you can also take a loan against the PPF account.