If you are looking for a safe and tax-efficient way to build wealth over time, the Public Provident Fund (PPF) offered by the Indian Post Office is an excellent option.
By investing just Rs 411 per day (equivalent to Rs 12,500 per month or Rs 1.5 lakh per year), you can accumulate a tax-free corpus of Rs 43.6 lakh in 15 years at the current annual interest rate of 7.9%, compounded yearly. Nearly half of this amount-about Rs 21.1 lakh-comes from interest earned, which is completely tax-free under Section 80C of the Income Tax Act.
Government-Backed Security
Your principal is fully protected by the government.
Returns are guaranteed and not subject to market fluctuations.
Tax Advantages
Contributions qualify for deduction under Section 80C (up to Rs 1.5 lakh per year).
Interest earned and maturity proceeds are completely tax-free (Triple-E benefit: Exempt-Exempt-Exempt).
Flexible Contributions
Minimum annual deposit: Rs 500.
Maximum annual deposit: Rs 1.5 lakh.
Contributions can be made lump-sum or in up to 12 installments during the financial year.
Eligibility
Any Indian citizen, regardless of age, can open a PPF account.
Joint accounts are not allowed.
Loan and Withdrawal Facility
Loan against PPF balance is available from the 3rd to 6th financial year.
Partial withdrawals are allowed from the 7th financial year onwards, offering liquidity when needed.
Digital Convenience
Contributions can now be made online via DakPay app or India Post Payments Bank (IPPB).
Link your bank account to IPPB, select PPF, enter account details, choose the amount, and confirm the transaction. A confirmation message is sent immediately.
Offers higher returns than most bank fixed deposits.
Fully government-backed, ensuring capital safety.
Provides long-term wealth creation and retirement security.
Tax-free status on both contributions and returns makes it an ideal investment for long-term goals such as children's education, home purchase, or retirement.
| Parameter | Value |
|---|---|
| Daily Contribution | Rs 411 |
| Monthly Contribution | Rs 12,500 |
| Annual Contribution | Rs 1.5 lakh |
| Tenure | 15 years |
| Interest Rate | 7.9% p.a. (compounded yearly) |
| Total Corpus at Maturity | Rs 43.6 lakh |
| Total Interest Earned | Rs 21.1 lakh |
By starting early and investing consistently, you can maximize the power of compounding and secure your financial future with minimum risk.