Public Provident Fund Interest Rate - July to September 2019:
The Indian government recently cut the interest rate on PPF investment from 8 to 7.9% compounded yearly. This reduction in rate is likely to affect the final maturity amount an investor might be expecting after the completion of 15 year lock-in period. But, the revision of PPF and other small savings schemes' interest rate is a routine procedure, done by the government quarterly. In addition, 7.9% per annum is still an amply high interest rate as compared to the bank fixed deposits (FD) and other schemes. Not only this, the other benefits of Public Provident Fund accounts continue to attract investors who want to save tax & get an assured return without market risks.
Have a look at the estimated sum of money that a person can get by investing Rs 1000, Rs 2000, Rs 5000 & Rs 10000/month in the PPF account offering 7.9% interest are:
PPF Investment: Rs 1000/month
If you invest Rs 1000 / month or (Rs 12000 / year) then you may get up to Rs 3, 50,000 on its maturity i.e. after 15 years.
PPF Investment: Rs 2000/month
If you invest Rs 2000 / month (or Rs 24000 / year) then you could earn up to Rs 7 lakh on its maturity after 15 years.
PPF Investment: Rs 5000/month
If you invest Rs 5000 / month (or Rs 60,000 / year) then you may get up to Rs 17 lakh after 15 years i.e. at the time of maturity.
PPF Investment: Rs 10000/month
Lastly by investing Rs 10,000 / month (or Rs 1, 20,000 / year) you could earn up to Rs 35 lakh upon maturity after 15 years.
Through the above calculations it is quite obvious that Public Provident Fund is still a good option if you are looking to collect a lump sum amount over a long period. Besides this, PPP investment also enjoys 'Exempt, Exempt, Exempt' status, which means there is no tax on the sum invested in PPF account, on the interest received & on the amount withdrawn during maturity.
You may also open a PPF account with any commercial banks like SBI, ICICI bank, HDFC Bank and Post Office.
It is important to mention that Public Provident Fund scheme is one of the most popular long-term investment options supported by the Central Government of India. The minimum amount that can be invested is Rs 500 while the maximum is Rs 1, 50,000 in a financial year in the PPF account.
By investing some amount monthly, you can earn good returns later on. So what are you waiting for!!!
