Post Office Scheme: In today’s era, everyone wants to invest their hard earned money in a place where the money is not only safe but also gets strong returns on it. Away from the ups and downs of the stock market, Post Office’s Public Provident Fund (PPF) scheme is no less than a boon for those who dream of becoming a millionaire without any risk. This is a scheme that is considered a ‘powerhouse of safe investment’ in the financial world. If you also want to build a large fund for future needs, children’s education or retirement, this plan can prove very useful for you.
How will savings of ₹411 become ₹43 lakh?
The biggest rule of thumb in investing is to start early and be consistent. Post office PPF scheme math is very simple and profitable. By investing in this scheme, you can accumulate huge amount for long term. As per the information provided, this scheme is currently offering an attractive interest rate of 7.9%.
If you do the math, by saving just ₹411 per day, you save ₹12,500 a month. This way your total investment in a year becomes ₹1.5 lakh. The maturity period of PPF is 15 years. If you maintain this discipline and deposit ₹1.5 lakh every year, after 15 years you will have a fund of around ₹43.60 lakh. The most interesting thing about this is that only ₹22.5 lakh will go out of your pocket, while the remaining around ₹21 lakh will be given to you as interest only.
Government guarantee and tax exemption
Tax is the biggest worry for the common investor, but PPF investors get tremendous benefits here too. This scheme comes under ‘EEE’ (Exempt-Exempt-Exempt) category. This means that there is no tax on the principal amount invested, neither on the interest received, nor on the entire amount received on maturity.
Under Section 80C of Income Tax, you get tax exemption on investments up to ₹1.5 lakh per annum. Also, from a security point of view, this is a scheme supported by the Government of India. While in bank FD, there is insurance only up to a limit, while in PPF, every single penny of you is protected under the government’s ‘sovereign guarantee’.
Loans will also be available as per requirement
One cannot predict when one will suddenly need money in life. Even in this situation, this post office scheme does not give up on you. Between the third and sixth year of opening a PPF account, you can also take a loan against your deposited amount. This facility proves to be very helpful in emergency situations, as the interest rates on these loans are much cheaper than personal loans and repayments are also easy.
Apart from this, this scheme is also quite flexible regarding investment. It is not necessary that you deposit a huge amount every month. You can deposit a lump sum as per your convenience or invest bit by bit in 12 installments throughout the year.
No hassle of long lines, invest from home
You don’t have to go to the post office or stand in long queues like in the old days. With the Digital India campaign, post offices have also become hi-tech. Now you can operate your PPF account from home through India Post Payments Bank (IPPB) or DakPay app.
For this you just have to link your IPPB account with your main bank account. Once linked, you can transfer money in a few clicks by selecting the PPF option in the app.