PPF Scheme 2024: It has come to our attention that you wanted to get basic knowledge about PPF today. We will give you in-depth knowledge on the Public Provident Fund. This scheme entails tax incentives and is among the most used schemes in the country.
This is a saving plan floated by the Government of India where investors can save money while enjoying tax freedom. So, if you wish to learn more about this scheme, then you should read this article till the end. It can be only one contribution to a PPF account for a fiscal year; however, one can open an account for one’s children.
The provisions pertaining to minimum investment and locking of the amount at the time of maturity under the PPF scheme
The minimum amount of investment in a PPF plan is ₹ 500 for a year, and the maximum amount is ₹ 50000 for a year. If you wish, you can invest a large sum all at once. For now, the PPF scheme offers an interest rate of 7.1%, but like other government saving schemes, its interest rate varies every year depending on the decisions of the central government.
The interest is computed monthly on the average minimal balance between the 5th of the next month and the end of the month preceding the payment of interest.
Furnishing of the Investment Term and its Extension in the PPF Scheme
PPF basically has a maturity period of 15 years, though this can be further stretched by another five years if one wishes to do so. Subsequently, there is an option to reinstate the scheme every five years from the maturity date.
Simply put, investments in the PPF account are allowed for tax deductions under Section 80C of the IT Act. It is an interest rate adjusted by the government quarterly and is free from income tax.
Interest Earning on a Monthly ₹1,000 Investment for the Period of 15 Years
At this ratio, if one invests ₹1,000 per month in PPF at an interest rate of 7.1%, the total amount invested over a period of 15 years will come to ₹180,000. If the interest rate is held constant, the interest that will be accumulated will be rupees one hundred forty-five thousand four hundred and fifty-seven, and the total sum shall be rupees three hundred and twenty-five thousand four hundred and fifty-seven after fifteen years.
