Post Office Scheme, how to earn money: The specialty of this scheme is that your investment in it is completely safe. It is not affected by market fluctuations.
Post Office Scheme, how to earn money: If you know how to invest money properly, then there are many such schemes which can make you rich. One such scheme is the Public Provident Fund (PPF) scheme of the post office. This scheme of Post Office is very helpful in making big corpus in the long term.
The specialty of this scheme is that your investment in it is completely safe. It is not affected by market fluctuations. These interest rates are fixed by the government, which is reviewed on a quarterly basis. The post office is currently getting 7.1 percent annual interest on the PPF scheme.
Account can be opened in bank branch
You can open Public Provident Fund (PPF) account at the post office or bank branch. This account can be opened with just Rs 500. In this, up to Rs 1.50 lakh can be deposited annually. The maturity of this account is 15 years. But, after maturity, there is a facility to extend it further in the bracket of 5-5 years.
Will make crorepati by investing Rs 12,500 every month
If you deposit Rs 12,500 in a PPF account every month and maintain it for 15 years, you will get a total of Rs 40.68 lakh on maturity. In this, your total investment will be Rs 22.50 lakh, while Rs 18.18 lakh will be your income from interest.
This calculation has been done assuming the interest rate of 7.1% per annum for the next 15 years. The maturity amount may change when the interest rate changes. Know here that compounding in PPF happens on an annual basis.
There will be a profit of crores like this
If you want to become a millionaire from this scheme, then you have to increase it twice after 15 years for 5-5 years. That is, now your investment tenure has become 25 years. Thus, after 25 years your total corpus will be Rs 1.03 crore. Your total investment in this period will be Rs 37.50 lakh, while you will earn Rs 65.58 lakh as interest income.
Keep in mind that if you want to extend the PPF account further, then the application has to be given one year before the maturity. The account cannot be extended after maturity.
Benefit on tax
The biggest advantage of the PPF scheme is that it provides tax benefits under section 80C of the Income Tax Act. In this, deduction can be taken for investment up to Rs 1.5 lakh in the scheme. The interest earned and maturity amount in PPF is also tax free. In this way, investment in PPF comes under the ‘EEE’ category.
Most importantly, the government sponsors small savings schemes. Therefore, the subscribers get complete protection on investment in this. In this, there is a sovereign guarantee on the interest earned.