Post Office PPF calculation: Public Provident Fund (PPF) was established many years ago by the Government of India to benefit small savers who do not want to take risks. It is one of the most popular government sponsored savings programs in India.
PPF is also one of the few schemes that offers the public an opportunity to save tax through its Exempt-Exempt-Exempt (EEE) facility, which means it is a completely tax-free savings option. PPF was introduced in 1968 by the National Savings Institute of the Ministry of Finance. It has become an important means for Indians, allowing them to enjoy tax benefits.
PPF offers an annual interest rate of 7.1%, with interest calculated on a monthly basis. According to the guidelines, investors can invest in their PPF account continuously for 15 years.
However, if the money is not needed at the end of 15 years, the PPF account can be extended for as many years as required. It can be extended for another five years by filing PPF account extension form. The investor will have to deposit at least Rs 500 per year in the PPF account and a maximum of Rs 1.5 lakh can be contributed every year.
PPF offers an annual interest rate of 7.1%, with interest calculated on a monthly basis. According to the guidelines, investors can invest in their PPF account continuously for 15 years.
However, if the money is not needed at the end of 15 years, the PPF account can be extended for as many years as required. It can be extended for another five years by filing PPF account extension form. The investor will have to deposit at least Rs 500 per year in the PPF account and a maximum of Rs 1.5 lakh can be contributed every year.
If you keep doing this from the age of 25 to the age of 50 i.e. for 25 years, then the amount you get on maturity can be up to Rs 1.03 crore lakh. This amount is completely tax-free and the total interest received on it will be around Rs 66 lakh. In 25 years, the total amount invested by you will be around Rs 37 lakh.
A better way to maximize investment returns is to deposit money between the 1st and 5th of each month, as interest is calculated monthly. However, if you are unable to invest such a huge amount, you can deposit at least Rs 500 per year and you will still get good interest.
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