If you are looking to save money for the future, but want your deposits to be safe and grow, then Post Office Public Provident Fund (PPF) is the best scheme for you. This is a government scheme that keeps your money safe and at the same time offers you good interest on it.
Post Office Scheme
In the PPF scheme, you can deposit fixed amounts every year. In this scheme, every year interest is earned on your deposits and helps in increasing your money by way of compound interest. The total time period for the scheme runs for 15 years after which you get a large amount in terms of your deposit amount as well as interest.
What will you get if you deposit ₹ 50,000 every year
Say you save ₹ 50,000 with this scheme every year. After doing it for 15 years, your total deposited amount will be ₹ 7,50,000. But the most significant thing is that interest received on it at the rate of 7.1% will allow your amount to grow to ₹ 13,56,070, after 15 years. Out of this, ₹ 7,50,000 will be your deposited amount, while ₹ 6,06,070 will be received as interest.
PPF account works on the phenomenon of compounding interest. This means every year interest is added up to the deposited amount and next year this interest amount also gains interest. This continues for a total of 15 years and as a result, your amount increases gradually.
How to Create an Account
You must visit the post office personally to set this account up as it is a requirement for taking participation in this agreement, wherein you must produce the following documents-aadhar card, PAN card, and a passport size photo. Nowadays, this can be done online, which makes it more convenient, too.
Other advantages of the scheme
It provides tax benefits for the amount deposited in this account under section 80C of the Income Tax Act. The interest as well as the maturity amount is tax exempt. Since it is run by the government, it is the safest scheme.
For whom is this scheme made
The PP account is best suited for people who like to save money in a risk-free manner for their future. Working professionals, housewives, and small entrepreneurs are the ideal candidates for this scheme. It would be a great way to save for larger necessities like children’s education, marriage, or retirement.
