Public Provident Fund: A look at current returns

Business

11 Sep 2019

Investing in Provident Funds? Here's how much you can earn

Public Provident Fund, popularly known as PPF scheme, is a long-term savings scheme, launched by the National Savings Institute (Government of India) in 1968.

The scheme is aimed at providing small-scale savings and investment prospects to its users.

It offers decent annual returns, and guaranteed tax saving benefits.

If you are thinking to invest in PPF, here's how much you can earn.

Details

Key things to know about the PPF scheme

Key things to know about the PPF scheme

The lock-in period of the scheme is fixed at 15 years, although it can be extended indefinitely in a "block of 5 years".

Banks offer returns at the Rate of Interest fixed by the government. The current rate is 7.9% per annum.

Also, interest income earned from PPF account is fully tax exempt.

Further, one can also apply for loan against their PPF account.

Return

What an investment of Rs. 1.5 lakh/annum will earn you

The maximum amount you can invest in the PPF scheme in a year is Rs. 1.5 lakh.

Assuming that the rate remains constant (at 7.9%), you will earn the following amounts (adjusted to the nearest zero):

At the end of 15 years (maturity-period): Rs. 43.5 lakh.

At the end of 20 years: Rs. 70 lakh.

At the end of 25 years: Rs. 1.1 crore.

Love Business news?

Stay updated with the latest happenings.

Yes, notify me

Eligibility criteria: Who can invest in PPF scheme

Following are the rules for eligibility: 1) All Indian residents can open a PPF account. 2) A person is allowed to open only one PPF account. 3) Minors can also get a PPF account opened, upon furnishing a legal proof of age.

Procedure

Here's how you can open a PPF account

Here's how you can open a PPF account

To open a PPF account, head to your bank's nearest branch, and obtain a PPF account opening form.

Fill all the required information, attach necessary documents, and submit the form.

The documents needed include a valid proof of identity (PAN/DL/Voter ID/Passport), and your recent passport-size photographs.

You'll be required to transfer a minimum specified amount to your newly opened PPF account via cheque/pay-in slip.

Share this timeline

Business

Finance

Financial Bytes

FinancialBytes

Investment

Public Provident Fund

Public Provident Fund Account

Public Provident Funds

SBI

State Bank of India

DL

National Savings Institute

National Savings Institute (Government of India

PAN

PPF

Provident Funds

Voter ID

Share this timeline

Ask NewsBytes
User Image

Next Timeline