Investing in PPF can make you a millionaire even at low interest rate, seeing the calculation you will say wow yourself!


The Central Government revises the interest rate on PPF account every quarter.
The maturity period of PPF account is 15 years.
Form 16-H has to be submitted to keep the account running further.

New Delhi. Investing in Public Provident Fund (PPF) is not only risk-free, but also offers guaranteed returns. Due to facilities like good interest rate and tax exemption, the number of people investing in PPF is increasing. A minimum of Rs 500 and a maximum of Rs 1.5 lakh can be deposited in PPF in a financial year.

At present, the PPF account holder is getting interest at the rate of 7.10 per cent on PPF. The interest rate of PPF is revised every quarter. If we also calculate on the basis of the average interest received in the last few years, then if a person invests 12,500 per month in PPF account for 35 years, then he will get Rs 2.27 crore on maturity of the account. Tax Exemption is available under section 80C on the investment made on PPF. There is no tax to be paid on the interest income and also on the amount received on maturity. Not only this, subscribers can also take loan on PPF account. The interest on this loan is also not very high.

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Maturity period can be extended
According to a report in Live Mint, SEBI registered tax and investment expert Jitendra Solanki says that investments up to Rs 1.5 lakh are exempt under Section 80C of the Income Tax Act. In this way, tax exemption of 1.5 lakh can be availed annually. Solanki told that the maturity period of PPF account is 15 years. Form 16-H has to be submitted to keep the account running further. This further increases the account for five years. The account holder can extend the maturity period of the account several times for five years each. In this way, if a person wants to invest in PPF for 35 years, then he will have to submit Form 16-H in the 15th, 20th, 25th and 30th year of account opening.

This is how money will grow
Assuming a PPF interest rate of 7.10 per cent for the next 35 years, if an investor invests Rs 12,500 per month or Rs 1.50 lakh in a year, he will get Rs 2,26,97,857 on maturity. His total investment in 35 years will be Rs.52, 50, 000. He will get an interest of Rs 1,74,47,857 on this investment. A person can open only one account in his name.

Tags: Epfo, investment tips, personal finance, pf account, ppf, PPF account

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