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Post Office Scheme: Everyone wants a part of their hard-earned money to be invested in a safe place. And get good returns on it too. In such a situation, post office savings schemes are the first choice of people, because they come with full government guarantee.
One of these is the Public Provident Fund (PPF), which is considered the most reliable and best option for tax-free investment.
Why is it special?
By investing in PPF, you get 7.1% annual interest. This interest is completely tax-free. Not only this, the amount invested in the scheme, the interest received on it and the entire interest received on maturity are all completely tax-free. This is why it is called EEE (Exempt-Exempt-Exempt) scheme. It has a lock-in period of 15 years. That means you cannot withdraw the entire amount in between, but if needed, you are allowed to take a loan and withdraw some money.
Starting from just Rs 500
If you are thinking that such a big scheme requires a lot of money, then it is wrong. You can open a PPF account with just Rs 500. A maximum of Rs 1.5 lakh can be invested in a financial year. The method of investing is flexible. You can invest money every month or deposit it in one go. Even after the completion of the 15-year period, if you want, you can extend it for 5-5 years and make your fund even bigger.
This is how a fund of Rs 40 lakh will be created
Suppose a person invests a maximum of Rs 1.5 lakh every year in this scheme. That is, about Rs 12,500 every month. If he does this for 15 years, his total investment will be Rs 22.5 lakh. The interest received on this will be about Rs 18.18 lakh. That is, after 15 years, the total amount in the hands of the investor will be about Rs 40.68 lakh. Imagine, with regular savings, you can climb the first step to becoming a millionaire.
- An account can be opened in any bank or post office.
- You can take a loan against your PPF balance only in the initial years.
- The option of partial withdrawal is available after completion of 5 years of the account.
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