The Post Office Public Provident Fund stands as one of the safest investment avenues in India, with a very high level of tax efficiency. Backed by the government and guaranteed, PPF accounts are ideal for creating wealth over the long term. By putting away ₹35,000 each year in a Post Office PPF scheme, an investor can eventually gather a sum of around ₹13.56 lakh in 15 years through the magic of compounding and exemptions from tax.
Mechanics of a Post Office PPF
PPF accounts allow persons to make deposits of a fixed amount every year: the minimum amount being ₹500 while the maximum amounts to ₹1.5 lakh per financial year. The interest rate on a PPF account is set by the government and is compounded yearly. This rate being now about 7.1% per annum makes the PPF an ideal option for all conservative investors interested in growing their money without risks involved in the market. Deposits paid in a PPF account are allowed as deductions under Section 80C of the Income Tax Act, thereby serving dual purposes of wealth accumulation and tax savings.
Growth of ₹35,000 per Year
Should yearly deposits of ₹35,000 be made for 15 years by an investor, the total amount contributed as deposits shall be ₹5,25,000. At the current interest rate of 7.1% per annum, PPF would approximately grow to a maturity value of ₹13.56 lakh after 15 years. The amount would include the principal and interest amount earned and shall be completely exempt from tax. The compounding effect lends itself such that interest from previous years also accumulates interest in subsequent years, translating into an exponential growth over the long term.
Benefits of Post Office PPF Investment
The PPF plan suits people with a desire for a safe and disciplined investment avenue. It makes saving a regular habit, assures fixed returns, and permits partial withdrawals after seven years. This further guarantees the investment’s security since it is government-backed.
Conclusion
By investing ₹35,000 every year in a Post Office PPF account, the corpus will grow to an amount of ₹13.56 lakh in 15 years. Hence, the PPF account is considered a really good performing and safe option for your savings in the long term. Combining guaranteed returns, tax benefits, and financial discipline, the PPF is amongst the most trusted investment options in India for creating wealth in a slow and safe manner.
