PPF is a safe government scheme. With its help, you can easily deposit a fund of more than Rs 1 crore in the long term.
PPF i.e. Public Provident Fund is a very popular government savings scheme. There is no risk of losing money in this scheme. For this reason, with the help of PPF, you can collect huge funds in the long run. The special thing about this scheme is that you can open a PPF account in the name of your children also.
Special features of PPF
- Interest in PPF is higher than that in FD. At present the interest rate is 7.1 percent.
- This is a long term plan. There is a lock in period of 15 years. You can further extend it for a period of 5-5 years.
- After a period of 15 years you can withdraw the entire money.
- PPF is an EEE category scheme. In this, the entire amount received on maturity is tax free.
- Tax exemption of up to Rs 1.50 is given in PPF under Section 80C of Income Tax (old tax system).
- Since it is a government scheme, there is no risk of losing money.
- Interest on this is credited every year.
- Let us tell you, if you open a PPF account in the name of your children, then the parents or guardian will have to operate the account till the child turns 18 years of age. The exemption on child’s PPF account and parent’s PPF account cannot exceed Rs 1.5 lakh.
How to deposit Rs 1 crore through PPF
You can easily deposit a fund of Rs 1 crore through PPF. For this, you will have to deposit Rs 12,500 every month i.e. Rs 1.5 lakh per year for 25 years (15+5+5). During this period, you will deposit Rs 37,50,000 in PPF and you will get a total interest i.e. benefit of Rs 65,58,015. In this way you will be able to deposit Rs 1,03,08,015 during 25 years.