The Public Provident Fund (PPF) scheme of the Post Office is still one of the most reliable long-term savings options in India. It is supported by the Indian Government and thus offers good interest rates along with tax benefits and guaranteed returns. The annual investment of ₹35,000 will result in a risk-free foundation of almost ₹13.56 lakh in 15 years for an individual looking for stability and gradual growth.
PPF Scheme Overview
The PPF scheme was initiated for the sake of small savings with guaranteed returns and long-term benefits. It runs with a 15-year lock-in period, which is great as it fosters disciplined investment habits. Minimum deposit of ₹500 and maximum deposit of ₹1.5 lakh is allowed for the entire financial year. The interest rate is recalibrated every three months by the Ministry of Finance, which ensures a fair and stable alignment between the market conditions and the expertise of domestic investors.
Example and Returns of Investment
An investor, who pays in ₹35,000 every year for 15 years, will have the amount generating compound interest yearly. If the average interest rate is 7.1%, the overall maturity value turns to be around ₹13.56 lakh. From this, the investor’s total investment of ₹5.25 lakh is returned and interest of approximately ₹8.31 lakh is given.
| Annual Investment (₹) | Investment Term (Years) | Interest Rate (%) | Total Amount (₹) |
|---|---|---|---|
| 35,000 | 15 | 7.1 | 13,56,000 |
Post Office PPF Major Advantages
The PPF scheme gives various advantages including the tax deduction under Section 80C of the Income Tax Act. Maturity amount and interest earned are also exempted from taxation.
