The Public Provident Fund (PPF) is a government-backed long-term investment scheme that offers tax benefits. You can invest a minimum of Rs. 500 and a maximum of Rs. 1.5 lakh annually in this scheme.
Post office schemes are a great option for investors looking for safe investments and guaranteed returns. Like banks, post offices also have many schemes. The Post Office Public Provident Fund Scheme is a special scheme for long-term investors.
The PPF scheme offers an interest rate of 7.1 percent. In this scheme, you can invest a minimum of Rs 500 and a maximum of Rs 1.5 lakh annually. By investing through this scheme, you can accumulate a large sum. Tax benefits can also be availed through this scheme.
This scheme is for 15 years. In this scheme, you can create a large sum at maturity by saving a small amount every day. If you save Rs 250 daily for the PPF scheme and invest Rs 7500 every month, the total investment for the year will be Rs 90,000.
According to the PPF calculator, if you continue to invest Rs 90,000 annually for 15 years, a total of Rs 13,50,000 will be invested. If you get an interest rate of 7.1% on this, the annual interest will be Rs 10,90,926. This will add up to a total interest of Rs 24,40,926 in 15 years.
PPF is considered a good scheme in terms of tax saving. This is an EEE type scheme. In this, there is no tax on the amount deposited every year, the interest received on this amount every year and the lump sum received at maturity is also tax-free. There is also an opportunity for income tax savings on investments, interest and maturity amount made in the Public Provident Fund scheme which comes under the EEE category.
Loan facility is also available to PPF account holders. Loans can be availed on the basis of the amount deposited in the PPF account. It is also noteworthy that this loan is available at a lower interest rate than other unsecured loans.
The interest rate on PPF loan is only 1% higher than the interest rate of PPF account. That is, if you get 7.1% interest on the amount deposited in the PPF account, then you only need to pay 8.1% interest on the loan taken under this scheme.