A fund of ₹40 lakh built with a monthly saving of ₹12,500 as post office scheme ensures safety and returns
New Delhi (The Uttam Hindu): If you want to invest your hard-earned money in a place where capital safety is guaranteed along with steady returns, the Post Office Public Provident Fund (PPF) scheme can be a reliable option. This government-backed scheme is especially popular among investors who prefer secure, long-term savings with tax-free benefits and want to stay away from market risks. At present, the government is offering an interest rate of 7.1 percent on PPF, making it an attractive choice for disciplined savers.
One of the biggest advantages of the PPF scheme is its tax structure. It falls under the ‘EEE’ (Exempt-Exempt-Exempt) category, which means the amount invested, the interest earned, and the maturity value are all completely tax-free. Investors also get tax benefits under Section 80C of the Income Tax Act. The scheme has a lock-in period of 15 years, which can be extended further in blocks of five years. The minimum annual investment is ₹500, while the maximum limit is ₹1.5 lakh in a financial year.
If the goal is to build a fund of around ₹40 lakh through this scheme, the calculation is simple. By saving ₹12,500 every month, you invest the maximum annual limit of ₹1.5 lakh. Over 15 years, the total contribution comes to ₹22,50,000. At the current interest rate of 7.1 percent, the interest earned during this period would be approximately ₹18,18,209. As a result, the maturity amount after 15 years would be around ₹40,68,209, and the entire sum would be tax-free.
Apart from safety and returns, PPF also offers liquidity benefits. The account can be opened easily at any post office or authorized bank. From the third financial year, account holders can avail loans against the balance. Partial withdrawals are allowed after completing five years if there is a financial need. Overall, for long-term, low-risk savings and wealth creation, this post office scheme remains a strong and dependable option.