The Post Office's Public Provident Fund (PPF) scheme offers 7.1% interest and tax exemption benefits. If an individual invests ₹1.5 lakh every year for 25 years, they can build a fund of ₹1.03 crore and receive an income of approximately ₹61,000 per month after retirement.
Post Office Scheme: For individuals seeking a stable income after retirement, the Post Office's Public Provident Fund (PPF) scheme is a secure option. This scheme is popular due to the 7.1% annual interest rate, backed by a government guarantee, and tax exemption benefits. If an investor deposits ₹1.5 lakh every year for 25 years, they can build a fund of approximately ₹1.03 crore and earn up to ₹61,000 in interest income per month, which can make old age financially secure.
What is the PPF Scheme?
The Public Provident Fund scheme is a 100% government-guaranteed scheme. Currently, it offers an annual interest rate of 7.1 percent. Investors also receive tax benefits, as you can avail tax exemption of up to ₹1.5 lakh every year under Section 80C of the Income Tax Act. The PPF scheme is long-term and requires regular investment.
15+5+5 Formula: How to Become a Crorepati
By investing in PPF, you can build secure wealth in the long term. The 15+5+5 formula can be adopted for this.
- Deposit ₹1.5 lakh every year for the first 15 years. The total investment will be ₹22.5 lakh.
- At a 7.1 percent interest rate, this amount will grow to approximately ₹40.68 lakh after 15 years.
- If this amount is extended for another 5 years without new investments, it will reach up to ₹57.32 lakh.
- Adding another 5 years will bring the amount to ₹80.77 lakh.
- If you continue to deposit ₹1.5 lakh every year for the entire 25 years, the total amount can reach up to ₹1.03 crore.
Thus, this scheme can become a financial support in old age and ensures a stable monthly income for investors at the time of retirement.
Monthly Income of ₹61,000 Possible
After 25 years of investment and a 7.1 percent interest rate, your fund will earn approximately ₹7.31 lakh in interest annually. This means you can receive an income of around ₹60,941 per month. During this period, your principal amount, i.e., ₹1.03 crore, will remain completely secure.
Who Can Open a PPF Account?
- Any Indian citizen can invest in this scheme.
- An account can also be opened in the name of a minor with the help of their parents.
- The minimum amount to open an account is just ₹500.
- A joint account cannot be opened in this scheme; each individual will have a separate account.
Importance of Long-Term and Discipline
The true benefit of the PPF scheme lies in regular investment and discipline. Investors can build a corpus worth crores only by investing for a long time. This scheme is particularly beneficial for those who want to ensure their income after retirement without depending on anyone.
Combination of Tax and Interest
The interest earned on PPF investments is completely tax-free. Additionally, under Section 80C of the Income Tax Act, investors receive a benefit of up to ₹1.5 lakh in annual deductions. Thus, this scheme not only provides an opportunity to grow wealth in the long term but also ensures tax benefits.
Assurance of Safe Investment
Due to government guarantee, investments in PPF are completely secure. Market fluctuations or economic downturns have no impact on it. This is why this scheme is considered a reliable source of stable income in old age.
