PPF: What is Public Provident Fund? How can you build over Rs 66 lakh corpus in a few years?

Although investment in the stock market is increasing day by day and the number of demat accounts has also risen considerably in the last one year, a lot of Indians still prefer guaranteed return investment options such as fixed deposit (FD), public provident fund (PPF), Post Office Monthly Income Scheme (MIS), among others.

They think that non-market-linked investment options can keep their money safe. 

PPF is also one of the popular guaranteed return options that many Indians opt for.

Let's know more about the PPF scheme.

What is PPF?

It's a long-term investment plan suitable for people who want to earn higher but stable returns. Individuals who register a PPF account want to ensure that the principle sum is kept safe. When a PPF plan is created, an account is set up for the applicant in which money is deposited and interest is accumulated.

What is the interest rate?

Currently, the interest rate for the PPF scheme is 7.1 per cent. You can open an account in a post office or a bank.

Here's how you can accumulate a corpus of Rs 66,58,288

You can start investing from Rs 500 to up to Rs 1.5 lakh in the PPF scheme. The maturity period for this scheme is 15 years. But you can get it extended in blocks of 5 years.
If you invest Rs 1.5 lakh in PPF continuously for 15 years, then you will invest a total of Rs 22,50,000 and will get Rs 40,68,209 with interest.
 
But if you extend this for 5 years more and continue investing, you will invest a total of Rs 30,00,000. At an interest rate of 7.1 per cent, you will receive Rs 36,58,288 as interest and Rs 66,58,288 on maturity.
 
If you start investing in PPF at the age of 25 years, you will get this benefit at the age of 45.

What are the rules for investing in PPF?

One can extend the PPF account for another five years by visiting the post office within one year after maturity and informing the officials that you wish to extend it. You can extend it without paying a deposit. You are not required to make any more contributions; you will continue to earn interest on top of that.
 
In this method, you will continue to receive profits on the fund without investing any money. Not only that, but whatever cash you withdraw from your PF account each year, it will be tax-free.