Long-term investment plan in the Small Savings Schemes category is the Public Provident Fund (PPF). With a maturity period of 15 years that can be extended for an additional 5 years, it provides investors with substantial returns. This scheme allows individuals to invest up to Rs 1.5 lakh annually.
It is recommended to deposit the money prior to or on the fifth of each month to maximize returns. If the money is deposited after the fifth of the month, it may lose interest for that month.
For instance, if a person deposits Rs 1.5 lakh on April 20 into the PPF, they will only receive interest for 11 months of the fiscal year, yielding a return of Rs 9,762.50 for 2023-2024. For the same time period, on the other hand, depositing the same amount on April 5 will result in a profit of Rs 10,650.
For a considerable amount of time, the PPF interest rate has been constant at 7.1 percent. The annual interest rate, which is calculated monthly and credited to the account on March 31st, is set by the government.
With a maximum investment limit of Rs 1.5 lakh, the PPF plan is a popular choice for tax savings. It is tax-free because it is part of the Small Savings Schemes. If you want to invest for the long term or your retirement, this plan is a great option.
