PPF (Public Provident Fund) is small saving scheme which has Central Government backing.
- PPF accounts are generally opened for 15 year term
- PPF account can be extended by 5 years block with or without contribution.
- If offers tax rebate / saving on contribution under sect 80C
- The minimum deposit that you need to make in a year is Rs. 500 and maximum limit is Rs. 150,000
- The maturity amount and Interest is tax free
- Partial Withdrawal and Loan facility is available after completion of 6 years.
Power of Compounding
- The biggest advantages of PPF account is power of compounding.
- Compounding of interest is nothing but computing interest on the initial amount invested and also on the accumulated interest of previous periods.
- In compounding the most important factor is Time for which you remain invested.
- So start early and be invested for long.
- If you invest 1.5 Lakhs /year for 30 years, with 8.5% interest it become 2 Cr. That’s that power of compounding.
A famous Einstein quote goes “He, who understands the power of compounding, earns it and he who doesn’t pays it”.
So take advantage of compounding.
- There are many calculators available to calculate the PPF maturity amount.
- I have created a simple one, you can customize as per your requirement
- Download Link : PPF Calculator