Public Provident Fund: Here’s how you can take your PPF account balance to over Rs 1 crore
The Public Provident Fund is a government-backed scheme, by which, if invested properly, an account holder can even get as a lot as Rs 1 crore on the time of redemption.
Curiously, PPF not simply has revenue tax advantages, however the curiosity earned in addition to the ultimate maturity quantity on PPF deposits are tax-free. That’s the reason why the Public Provident Fund (PPF) is taken into account a very good choice for funding.
So as to accumulate such an enormous quantity over a time period, PPF account holders ought to know one of the best time to make investments, the kind of funding to be made and how is the curiosity calculated on the deposits?
(*1*)What’s the Public Provident Fund (PPF) and its present rate of interest?
The Public Provident Fund or PPF is a small-saving scheme that gives reasonable returns and big tax advantages, exemption, and capital safety. Moreover, the rate of interest provided on PPF is greater than most different funding schemes that provide assured returns.
A PPF account holder can both make an funding in a lump sum quantity or by means of month-to-month investments.
The present rate of interest is 7.1 % PA and the tenure of a PPF account is 15 years. The curiosity is calculated on a month-to-month foundation. Nevertheless, it’s credited to the PPF account solely on the finish of the monetary 12 months (March 31).
The minimal funding allowed is Rs 500 and the utmost is Rs 1.5 lakh for every monetary 12 months.
(*1*)How can an account holder accumulate Rs 1 crore of their PPF account?
If invested properly and persistently in PPF, one can develop into a crorepati on the time of redemption. Firstly, an investor ought to lengthen their PPF account after a 15-year maturity interval. After the maturity interval is over, account holders want to submit an software within the prescribed format for extension of their PPF account and it can be prolonged an infinite variety of occasions.
Right here is how a lot you want to make investments month-to-month or yearly:
As per the present rate of interest of seven.1 %, after 15 years, your PPF account can have a balance of practically Rs 40 lakh (with an funding of Rs 12,500 per thirty days or Rs 1.5 lakh every year).
To get Rs 1 crore, you can have to lengthen your account. As per the Public Provident Fund Scheme 2019 guidelines, you can lengthen the PPF account in a block of 5 years. Therefore, you can have to request an extension each 5 years.
On the finish of the prolonged interval of 5 years, your account balance will stand at round Rs 66 lakh. If the account is then prolonged for one more 5 years, the balance will attain round Rs 1 crore.
READ MORE: Need to revive your discontinued PPF account? Comply with these easy steps
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