National Savings Organization started PPF in 1968 as a small savings scheme. In PPF account, you have to invest for a period of 15 years. Interest is getting on this PPF account at the rate of 7.10 percent.
New Delhi. If you are looking for such an investment option, in which you can earn good returns with minimum risk, then Public Provident Fund (PPF) can prove to be better. In this you can start investing with just Rs 500. There is absolutely no risk on investment in PPF. Actually, this scheme is fully protected from the government. To earn a good return by investing in it, there is a need to invest carefully. Better returns can be achieved by investing in this scheme over a long period of time.
National Savings Organization started PPF in 1968 as a small savings scheme. A fund of Rs 15 lakh can be collected by investing Rs 5000 every month in PPF at the current interest rates. However, for this you have to invest for a period of 15 years. Let us tell you that this PPF account is getting interest at the rate of 7.10 percent. You will deposit a total of Rs 9 lakh in 15 years on the basis of Rs 5,000 per month. On this, according to the current rate, you will get Rs 6,77,840 interest i.e. on maturity you will get Rs 15.78 lakh.
The interest rate remains between 7 to 8 percent
The central government changes the interest rate on the PPF account every quarter. The interest rate usually remains between 7 to 8 percent, which is made more or less depending on the economic situation. The current interest rate of 7.1 per cent is higher than the fixed deposits of many banks. One can invest a minimum of Rs 500 and a maximum of Rs 1.5 lakh annually in a PPF account. Its maturity period is 15 years. After this, you can withdraw this money or you can carry forward for every 5 years.
How to get 12 lakhs from 1000 rupees a month
If you deposit Rs 1000 every month in PPF account, then in 15 years your investment amount will be Rs 1.80 lakh. Interest will be Rs 1.45 lakh on this i.e. after maturity you will get a total of Rs 3.25 lakh. Now if instead of withdrawing this amount, you allow it to remain in the PPF account for the next 5 years and continue investing Rs 1000 every month, then your total investment amount will become Rs 2.40 lakh. Interest of Rs 2.92 lakh will be available on this amount.
In this way after maturity you will get Rs 5.32 lakh. If you extend the maturity period of 15 years thrice for 5-5 years and continue investing Rs 1000 every month then the total investment amount will be Rs 3.60 lakhs. 8.76 lakh will get interest on this. In this way, a total of Rs 12.36 lakh will be available on maturity.
Loan facility is also available
If you have invested in PPF, then the facility of taking loan is also available on this account. Its benefit will be available in the third or sixth year of account opening. On completion of 6 years of PPF account, you can also withdraw a small amount of money.