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Public Provident Fund: Invest in PPF scheme to become a crorepati; know interest rate, maturity

Public Provident Fund (PPF) is one of the safest ways to build healthy, tax-free retirement funds.

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The Public Provident Fund, or PPF, was launched by the Indian government years ago to benefit small savers, who do not have a risk taking appetite. Public Provident Fund (PPF) is one of the safest ways to build healthy, tax-free retirement funds. It's one of the few savings accounts that compounds your investment over time and generates tax-free returns. The PPF is also one of the very few schemes that provides an option to the public to save taxes with its Exempt-Exempt-Exempt (EEE) feature, meaning that it is totally a tax free savings option.
 
PPF features, interest rate and maturity
 
The Public Provident Fund, or PPF is one of the highest rates of interest-paying risk-free schemes in India. Currently, PPF offers an annual interest rate of 7.1% and it is calculated on a monthly basis. As per the guideline, Investors can invest their money  in their PPF account for as many as 15 years in a row. A PPF Account Extension Form must be submitted in batches of five years to do this. PPF accounts allow for annual investments as low as Rs 500 and as high as Rs 1.5 lakh.
 

Become a crorepati by investing Rs. 417 a day
 
If you invest Rs 417 a day in your PPF account, the monthly investment value comes to around Rs 12,500. This means that per year, you are investing a little more than Rs 1,50,00 in your Public Provident Fund account, which is the maximum limit. In 15 years, the total amount accumulated will be Rs 40.58 lakh, and thereafter you have to extend the tenure twice in a block of five years each.
 
The amount you will receive upon maturity if you continue doing this from the age of 35 till the age of 60, or for 25 years, will be as much as Rs. 1.03 crore lakh. The total interest earned will be close to 66 lakh and will be completely tax-free. By the time you reach retirement age in 25 years, you would have saved a total of almost Rs 37 lakh.
 
As the interest is calculated monthly, it must also be noted that the optimal time to deposit money is between the first and fifth of the month in order to receive the highest returns on your investment.
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