Public Provident Fund or PPF account is generally considered a retirement-oriented investment fund. But, if you take PPF rate of interest into your portfolio seriously, then it can help you create a huge amount in 15 years, that can help you meet the higher studies or may be overseas studies of your child who is a toddler today. The Government of India (GoI) backed small saving scheme allows you to open PPF minor account and continue investing in it till maturity. According to the PPF calculator, if someone invests in a PPF account in a disciplined manner, his or her child will be a millionaire by the time PPF account will complete 15 years of its maturity period.
Speaking on the PPF account details; Mumbai-based tax and investment expert Balwant Jain said, “PPF account can be opened either in bank or in post office. The maturity period of the PPF account is 15 years and currently, PPF interest rate 2020 announced by the GoI in April to June 2020 quarter is 7.1 per cent.” Jain said that PPF account is generally considered a retirement-oriented fund aggregator tool but it can be used for meeting any other long-term investment goals like higher studies of your toddler or may be overseas studies of your child.
On how PPF Account is helpful in generating huge amount of money that can help a taxpayer make a child a millionaire after 15 years; SEBI registered tax and investment expert Manikaran Singhal said, “PPF allows an investor to invest in monthly mode as well. If a person invests Rs 60,000 per annum or Rs 5,000 per month in one’s PPF account, then assuming 7.1 per cent PPF rate of interest for the next 15 years, one will be able to get Rs 16,27,284, which can be used either for the higher studies of the child or for any other mid-term investment goal like buying a luxury car, bike, etc.
Jain said that PPF account holders can claim income tax exemption on PPF account investment up to Rs 1.5 lakh in a financial year under Section 80C of the income tax tool. So, one can buy a luxury car, bike or ensure higher education of one’s child by investing in this tax saving investment option.