Are you making the most out of your PPF? - PPF Interest Rate History

PPF Investment  - Generatebucks

I am sure none of us have met a person who wouldn’t love making extra money out of their investment. For Indian investors, there is a very safe investment scheme known as the Public Provident Fund (PPF) that allows one to invest for future and a great way to save tax under section 80C. This scheme was launched to encourage savings across income classes hence minimum deposit requirements are very low.

#PPF Interest Rate History

Almost everyone has a PPF account but unknown to most, there is a great way to make most of this relatively safe investment as well. As we all know, the PPF gets matured at the end of 15 years. which means you can only withdraw the entire amount after 15 years of investment. Additionally, PPF also offers loan facility from 3 to 6 years and you can withdraw some percentage of your saving after 7 years of initial investment.

#PPF Interest Rate History

Back to the main subject. Based on some calculations, we came up with some time-tested strategies that can leave you with more money than an average PPF invester.

Simple Strategy to earn more 

Invest at the beginning of the financial year! Despite the recent interest rate cut, PPF is still one the best investment bets out there provided you invest at the beginning of the financial year.

Here's how it works. Say, you invest the maximum amount of 1.5 lakhs to avail section 80C tax benefit in a year-in PPF every year for 15 years.

#PPF Interest Rate History

You have the following options 

  • Invest Rs.1.5 lakh at the beginning of the financial year, in the first week of April. At a current rate of 7.8% by end of 15 years, the total amount that you will get is Rs.43.2 lakh.
  • Invest at the end of the financial year and at the end of the tenure you will get Rs.40.09 lakh
  • Invest in the beginning of every month-that is Rs 12,500 for 12 months for 15 years and you will get a total amount of Rs.42.49 lakh
#PPF Interest Rate History

This clearly demonstrates that the earlier you invest in PPF in a financial year, the better your returns. An annual investment of Rs 1.5 lakh made over 15 years at the beginning of the financial year will leave you richer by Rs 3.11 lakh which is a tidy sum of money.

This article was also published in Colossalumbrella
Read more about Personal Finance

Post a comment