Public Provident Fund (PPF) is a safe and attractive investment option run by the government. This small savings scheme is especially suitable for investors who want to secure their future in a risk-free manner. You can open a PPF account through bank or post office, which has a maturity period of 15 years and can be extended for 5 years each if required.
The investment range in PPF ranges from a minimum of ₹500 to a maximum of ₹1.5 lakh per year. Currently, this scheme is offering an annual interest rate of 7.1%, which is determined every quarter. This rate is more attractive than the fixed deposit schemes of banks.
PPF is a long-term investment option in which your money is locked for 15 years. This gives flexibility to the investor – you can invest on monthly, quarterly, half yearly or yearly basis. This scheme is especially suitable for regular savers and those looking to build a strong financial base for the future.
Investment in PPF offers tax exemption of up to ₹ 1.5 lakh under Section 80C of the Income Tax Act. Additionally, the interest and maturity amount received on this scheme are completely tax-free, making it an attractive tax saving option.
As an example, if you invest ₹2,500 per month, a total investment of ₹4,50,000 over 15 years will give you a total return of ₹8,13,642, of which ₹3,63,642 will be interest. It is an effective means of converting small savings into a large corpus.
SBI savings account holders can open PPF account from home through YONO app. Those who do not use internet banking can open an account by visiting their nearest bank branch or post office. Identity card, proof of address and passport size photograph are required to open an account.
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