If you are thinking of saving through a small savings scheme, then Public Provident Fund ie PPF can be a good option for you. PPF is a long-term savings scheme. Since the maturity period of PPF is 15 years, it encourages long-term investments.
There are many benefits of investing in PPF, as well as the interest rate in Provident Fund you will get better than other savings schemes. This government scheme is a scheme giving guaranteed returns. One can become a millionaire through PPF within a given time period. You can open a PPF account in any nearest post office or bank.
The central government controls the interest rate
The central government controls the interest rate on PPF every quarter. The central government has not made any changes in the PPF till this quarter i.e. September 2022. On this quarterly small savings scheme, customers will get an interest rate of 7.1 percent. Investing in PPF not only earns attractive interest but also does not have to pay any tax on the returns earned from it.
NRIs cannot invest in PPF
Only Indian citizens can open an account in this long-term savings scheme of the Government of India. Indian citizens living abroad are not allowed to invest in PPF. Meaning, Non-Resident Indians (NRIs) cannot invest in Provident Fund (PPF). You can deposit a maximum of Rs 1.5 lakh in PPF. There is also a special facility to invest money in PPF. If you want, you can deposit money in installments every month or you can deposit 1.5 lakh rupees in a lump sum account. The government is currently paying 7.1 percent interest on PPF. Though the maturity period of PPF is 15 years, but if you do not need the money then you can extend this period up to 5 years.
Formula to become a millionaire
If you want to become a millionaire by the time of retirement, then you have to invest Rs 12500 every month for 25 years. In this way the total will be Rs 1.50 lakh in a year. After 25 years when you withdraw this money, it will become 103 crores. The principal amount in this 25-year investment will be Rs 37,50,000 and interest at the rate of 7.1 percent will be Rs 65,58,015.