Public Provident Fund (PPF) is a popular savings scheme offered by the Indian government through post offices and banks. PPF has always been trusted by risk-averse investors seeking long-term wealth accumulation. With its tax-free returns, government backing, and compounding benefits, PPF stands out among several other small savings schemes offered by the government.
In this story, we will give a detailed breakdown of how this popular scheme works and why it could be your ideal investment choice for securing your financial future.
Why choose PPF for long-term savings? Safety and growth:
The PPF scheme combines the safety of government backing with the power of compound interest. Your deposits earn interest, currently at 7.1%, which is compounded annually, ensuring that your money grows over time.
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-Deposits are eligible for deductions under Section 80C of the Income Tax Act.
-Interest earned is tax-free.
-The maturity amount is also exempt from tax.
Also read: SIP Return: THIS top-rated small cap mutual fund turned Rs 100 daily investment into 1.33 crore!
Flexibility in investment:
PPF scheme offers a minimum annual deposit requirement of just Rs 500, making it highly accessible even for those with modest incomes. On the other hand, the maximum annual deposit is capped at Rs 1.5 lakh, providing ample room for disciplined savings. This flexible range ensures that the scheme caters to a diverse group of investors, including salaried professionals, housewives managing household finances, and small entrepreneurs looking for secure investment options.
PPF Rules: Extension facility
There is a facility to extend the PPF after maturity i.e. 15 years. One can extend the account in five-year intervals indefinitely.
If you extend this scheme without investment after the maturity of 15 years, even then you continue to get 7.1% annual interest on your PPF corpus on the closing balance after 15 years.
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