New Delhi: The Public Provident Fund, or PPF, was established by the Indian government many years ago to benefit small savers who do not want to take risks. It is one of India's most popular government-sponsored savings programmes. The PPF is also one of the few plans that offers the public the opportunity to save taxes through its Exempt-Exempt-Exempt (EEE) feature, which means that it is a completely tax-free savings option. PPF, which was introduced in 1968 by the Ministry of Finance's National Savings Institute, has grown into a significant instrument for Indians, allowing them to enjoy tax benefits.


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PPF now offers an annual interest rate of 7.1%, with interest computed on a monthly basis. According to the guidelines, investors can invest in their PPF account for up to 15 years in a succession. However, if the money is not needed at the end of 15 years, the PPF account can be extended for as many years as needed. This can be done in five-year increments by filing a PPF Account Extension Form. PPF accounts allow investors to contribute as little as Rs 500 per year and as much as Rs 1.5 lakh per year.


With its great popularity, low risk, and tax-free characteristics, the PPF can help investors accumulate as much as Rs 1 crore if invested wisely. Investors must use the method outlined below to accomplish this.


If you invest Rs 417 every day in your PPF account, your monthly investment value is approximately Rs 12,500. This indicates you are investing slightly more than Rs 1,50,00 in your Public Provident Fund account per year, which is the maximum allowed. After 15 years, the total sum accumulated will be Rs 40.58 lakh, and you will have to extend the tenure again in five-year increments.


If you continue to do this from the age of 25 to the age of 50, that is for 25 years, the amount you will receive upon maturity may be as much as Rs 1.03 crore lakh. This amount is completely tax-free, and the total interest earned will be close to 66 lakh. In 25 years, the total amount you will have placed will be roughly Rs 37 lakh.


On that topic, it should be noted that the ideal approach to maximise your investment returns is to deposit funds between the 1st and 5th of each month, as interest is computed monthly.


However, if you are unable to invest such a large sum, you are under no obligation to do so. Individuals can deposit as little as Rs 500 per year in their PPF accounts, making it a highly flexible investment vehicle.