PPF return calculation: Want to start investing or are you looking for a way to earn good money from interest? Or do you want an investment where there is no risk? In such a situation, the Public Provident Fund (PPF) scheme is the best. Any citizen of India can invest in it. The biggest thing is that the benefits available to it remain the most preferred. The benefits of investing in PPF are told by the banks and post offices themselves. Good interest, tax-free investment, and money received on maturity is completely yours. It is an excellent tool from an investment point of view. The maturity period is 15 years. But, you can give an extension to the investment even after 15 years. If you give an extension, then your return (PPF return) will run at rocket speed and you will keep watching when the initial investment of Rs 5000 will become more than 26 lakhs.

You will get 3 options for maturity.

You get 3 options at the time of maturity. It is very important to understand these 3 options. First, withdraw your money after maturity. Second, even if you do not withdraw, you will continue to get interest. Third, you can give an extension for 5 years with a new investment. Let's understand how and what to do.

1. Withdraw the entire amount on maturity

Withdraw the amount deposited by you and the interest on the maturity of the PPF account. In case of account closure, the entire amount will be transferred to your account. The money and interest received on maturity will be completely tax-free. Apart from this, income tax exemption is available on investments up to 1.5 lakh every year. You will not have to pay any tax on whatever money you have deposited during the entire tenure.

2. Increase PPF investment for 5 years

The second option is to increase the investment after maturity. The scheme gives the option of account extension in 5-5 year tenures. However, if you want an extension for the next 5 years, then you will have to inform the bank or post office 1 year from the maturity of the PPF account. The good thing is that the rule of pre-mature withdrawal does not apply at the time of extension and you can withdraw money anytime.

3. Extend the scheme without investment even after maturity

The third option in the PPF account, even if you do not choose both the above options, the account will continue after maturity. There will be no need for new investment in this. Maturity will automatically increase for 5 years. But, the biggest advantage will be that you will keep getting interest on the deposited amount during this entire period. After this, it can be extended again after the completion of 5 years.

Where can you open a PPF account?

PPF account can be opened in any government or private bank. Apart from this, you can also open an account in any post office branch of your city. There is also an option to open an account for a minor. However, the holding of parents on behalf of the minor remains for 18 years. According to the rules of the Finance Ministry, a Hindu Undivided Family (HUF) cannot open a PPF account.

How will ₹5000 become 26.63 lakh rupees?

Currently, 7.1% interest is being received in the Public Provident Fund. Interest is calculated annually. But, it is decided on a quarterly basis. There has been no change in its interest rates for a long time. Let us assume that if you invest at the same interest rate for 15 or 20 years, then a large corpus will be created on different amounts. You can see the calculation below.

Disclaimer: This content has been sourced and edited from ZEE Business Hindi. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.