PPF Saving Tips: If you seriously invest in this scheme, you can save Rs 1 crore for yourself. The government gives an annual interest of 7.1 percent on the amount invested in PPF. You cannot withdraw the investment amount from this scheme for the first five years.
PPF Saving Tips: Public Provident Fund (PPF) is a long term investment scheme. By investing in this scheme, you can deposit a huge fund for your future. If you seriously invest in this scheme, then you can deposit Rs 1 crore for yourself. The government gives an annual interest of 7.1 percent on the amount invested in PPF. Apart from this, taxpayers also get the benefit of income tax deduction. Let us know how much money you have to invest in this scheme to deposit Rs 1 crore.
How much will have to be invested
Suppose a person starts investing in a PPF account in the first week of April of any year. The amount invested is Rs 1.5 lakh. Every year he invests Rs 1.5 lakh. That is, he saves Rs 12,500 every month. The same amount is invested for the next 25 years without any break. The end result will definitely be as surprising for the PPF account holder as it will be pleasant.
However, remember that it is most important to maintain continuity of investment and there should not be any kind of withdrawal from the PPF account in between. Also remember that the initial tenure of a PPF account is 15 years and the account holder has to extend the tenure twice in blocks of 5 years each.
You will get one crore rupees
In 25 years, the PPF account holder will invest up to Rs 37,50,000. This is a huge amount in itself, but it is not enough to become a millionaire. However, if you calculate the interest rate of 7.1 percent on this amount over a period of 25 years, you get a fantastic amount of Rs 1,03, 08,015. This is possible due to the compound interest benefit that the PPF account holder gets.
Locking period
PPF has a locking period of five years. That is, for the first five years, you cannot withdraw the investment amount from this scheme. PPF falls under the EEE category, which ensures tax exemption on the investment and the income from its interest. Under Section 80C of the Income Tax Act, an investment of up to Rs 1.5 lakh annually is eligible for tax exemption.
