Monthly Income in PPF Scheme:Post Office’s Small Savings Scheme Public Provident Fund is a very popular scheme for investment and savings in the country. This small savings scheme is also known as a retirement savings scheme. But do you know that after this scheme matures, it can also be used as monthly income. Actually, there is a rule to extend the Public Provident Fund and withdraw from it even after maturity. By taking advantage of this special rule, tax free income of Rs 24 thousand can be earned every month. You should know about this special rule.
SIP in Top Scheme: 5 mutual funds with 7 times return in 10 years, money increased by 22 to 25% annually in SIP, all got top rating
PPF Rules: Facility to extend
There is also a facility to extend Public Provident Fund after maturity i.e. after 15 years. This account can be extended for 5 years at a time. That means you can extend it for 5 years.
If you extend the investment scheme after maturity of 15 years, then after 15 years you will continue to get 7.1 percent annual interest (PPF Interest Rate) on the closing balance. Whereas if you extend it with investment, then interest on interest will be added to the scheme in the same manner as before maturity.
When you extend the scheme for 5 years without investment, you can withdraw any amount once in a year. Whereas if you extend with investment, you can withdraw up to 60 percent of the amount once in a year.
SIP King: SBI Mutual Fund’s scheme gave SIP returns of more than 20% per annum in 5, 10 and 15 years, lump sum investment increased by 18 times.
PPF: How much fund can be formed on maturity of 15 years
If you deposit maximum in PPF every financial year till maturity i.e. for 15 years, then according to the current interest rate, a total fund of Rs 40,68,209 can be raised.
Maximum deposit in a financial year: Rs 1.50 lakh
Interest rate: 7.1 percent per annum
Total deposit in 15 years: Rs 22,50,000
Total fund after 15 years: Rs 40,68,209
SIP Winner: This mutual fund scheme became the champion for 20 years, 1 lakh was converted into 51 lakh, monthly SIP of Rs 5000 made a millionaire
PPF: How will be the monthly income?
Here you ran the scheme for 15 years and created a fund of Rs 40,68,209. Now if you extend it for 5 years without investing anything, you will get 7.1 percent interest on the closing balance. You can withdraw any amount at one go in a year. Suppose you plan to withdraw the interest amount only once in a year.
Here you will get 7.1 percent annual interest on your closing balance. This will be Rs 2,88,843 in one year. You can withdraw this entire interest amount in one go in a year. If we divide it over 12 months, it will be Rs 24,000 per month. There will be no tax on this withdrawal.
PPF: If you invest for 20 years
Maximum deposit in a financial year: Rs 1.50 lakh
Interest rate: 7.1 percent per annum
Total deposit in 15 years: Rs 22,50,000
Total deposit in 20 years: Rs 30,00,000
Total fund after 20 years: Rs 66,58,288
SIP Return: Top rated scheme, one who did SIP by saving Rs 150 daily, got Rs 2 crore, lump sum investors got 31 times return
How will be the monthly income after 20 years?
It is clear from the above calculation that by extending the PPF account for 5 years, you can create a fund of around Rs 66.50 lakh. Now if you extend it for 5 years without investing anything, you will get 7.1 percent interest on the closing balance. You can withdraw any amount at one go in a year. Suppose you plan to withdraw the interest amount only once in a year.
Here you will get 7.1 percent annual interest on your closing balance. This will be Rs 4,72,738 in a year. You can withdraw this entire interest amount in one go in a year. If we divide this over 12 months, it will be Rs 39,395 per month. There will be no tax on this withdrawal.
How to open PPF account?
Any Indian citizen can open this account in Post Office Small Savings in his or her child’s name. Both offline and online processes are available for this. These are the necessary documents for this.
KYC documents that verify the identity of an individual, such as Aadhar Card, Voter ID Card, Driving License etc.
PAN card
address proof
Form for declaration of nominee
passport size photo
(source: india post, clear tax)
