HYDERABAD: Are you planning to multiply the amount by just saving little amounts then here is a good scheme from Public Provident Fund (PPF) where you can earn up to 14 lakhs in 20 years if you save just Rs 50 or 100 on a daily basis.
- Under the PPF scheme, security on your investment is guaranteed
- Interest earned under this scheme is not subject to income tax.
- PPF scheme also has a nominee facility.
- This account can be opened for 15 years at selected branches of post offices and banks, which can be extended up to 5 years.
One can simply open the PPF account with Rs 500. But it is necessary to invest at least Rs 500 in a financial year. A maximum of Rs 1.50 lakh can be invested in a year. The interest rates on this account are fixed by the Government from time to time. The account earned 7.1 per cent interest in the April-June quarter.
For Example if you have invested 200 Rupees a day:
Under this scheme, if you want to invest only by saving Rs 200 per day, it will be Rs 6000 per month. Thus your annual investment is Rs 72,000. If you do this for 15 years, your total investment is Rs.10,80,000. PPF can earn 7.1% compounding interest per annum. If you get interest at the same rate for 20 years, the total return is Rs.14.40 lakhs. That is, you get an additional benefit in the form of interest of Rs 17.55 lakh on your total investment.
Compound interest formula
A = P (1 + r / n) nt
A: Total Principal
r: interest rate
n: compound many times a year
nt: Investing all the time