Post Office PPF: An amazing Post Office program that allows you to invest Rs 5,000 per month and earn over Rs 26 lakh

Post Office PPF: An amazing Post Office program that allows you to invest Rs 5,000 per month and earn over Rs 26 lakh

Post Office PPF: The advantages of making an investment in PPF are outlined by the post offices and banks themselves. A tax-free investment with good interest rates and full ownership of the money earned at maturity. From the perspective of investments, this is an excellent instrument. Fifteen years is the maturity phase.

Are you seeking for a means to get a solid income from interest or would want to start investing? 

or seek for a risk-free investment. Under these circumstances, Public Provident Fund, i.e. The best plan is the PPF. Investing in it is open to all Indian citizens. The most important factor is that it offers the most favored advantages. The advantages of investing in PPF are explained by banks and post offices directly. A tax-free investment with good interest rates and full ownership of the money earned at maturity. From the perspective of investments, this is an excellent instrument. Fifteen years is the maturity phase. However, the investment may still be renewed after 15 years. If you extend, you'll see an exponential increase in profits and see the original Rs 5,000 investment grow to almost Rs 26 lakh.

When you reach adulthood, you have three choices. It is critical to comprehend these three choices. After maturity, take out your money first. Second, interest will still be accumulated even if you choose not to take the money out. Third, a five-year extension is possible with fresh funding. Let's examine the necessary steps and methods.

1. Take out the whole amount when you reach adulthood.

After your PPF account matures, withdraw your invested money plus interest. The whole amount will be transferred to your account in the event that the account is closed. Upon maturity, the money and interest will be fully tax-free. In addition, investments up to Rs 1.5 lakh are free from income tax annually. Throughout the duration of the tenure, you won't be required to pay taxes on the money you have placed.

2. Increase PPF investment by five years

After adulthood, the second choice is to expand investing. The account extension option under the plan is available for a five-year term. However, you must notify the bank or post office a year in advance of the PPF account's maturity if you would want an extension for the next five years. The benefit is that you may take out the money whenever you choose and the premature withdrawal restriction does not apply during the extension period.

3. plan without raising capital even after it matures

The third choice in a PPF account will keep the account active even after it matures if you do not choose both of the aforementioned alternatives. No more funding will be required for this. By default, maturity will be extended to five years. The largest benefit, however, is that interest will be paid to you on the cash you put over this whole time. Following that, when the full five years have passed, it may be renewed in the same way.

Where may a PPF account be opened?

Any public or private bank may establish a PPF account. In addition, you may establish an account at any branch of your city's post office. Opening an account for a minor is an additional option. Nonetheless, the parent's obligation on behalf of the minor lasts until the child becomes 18 years old. As per the guidelines set out by the Finance Ministry, a HUF is not permitted to create a PPF account.

How is Rs 5000 going to be worth Rs 26.63 lakh?

As of right now, the Public Provident Fund is giving out 7.1 percent interest. Every year, interest is computed. However, it makes this choice every quarter. Its interest rates haven't changed in a very long time. Assume for the moment that investing at the same interest rate for fifteen or twenty years will result in the creation of a sizable corpus in various quantities. The computations are shown below.

Monthly Investment This much money will be yours in fifteen (15) years; this much money will be yours in twenty (20) years; this much money will be yours in twenty-five (25) years.

3.18, 5.24, 8.17, 1000

6.37, 10.49, 16.35 (2000)

9.55, 15.73, 24.52, 3000

15.92 26.23 44.88 5000

31,85, 52.45, 81.76 10,000

12,500 65.57 ₹39.82 ₹1.02 crore