The government has not changed the interest rate of small savings schemes. This means that the interest rates of all small savings schemes will remain unchanged in the second quarter of this financial year.
These include PPF, Sukanya Samriddhi Yojana, Kisan Vikas Patra and Post Office Savings Deposit Schemes. The interest rate on PPF will remain 7.1 percent. This is the most popular investment option in small savings schemes.
Benefit of deduction on investment of Rs 12,500 every month
Tax deduction can be claimed on investment in Public Provident Fund ( PPF ). However, it must be kept in mind that only taxpayers using the old regime of income tax can claim this deduction. Deduction can be claimed by investing up to a maximum of Rs 1.5 lakh in PPF in a financial year. This means that if a person invests Rs 12,500 every month in PPF, then he can claim deduction on his total investment in a financial year.
PPF is an investment scheme with EEE tax benefits
By investing Rs 12,500 every month in PPF, a fund of Rs 40.6 lakh is created in 15 years. A big feature of PPF is that it comes under EEE tax-benefit investment options. This means that there is no tax on your contribution amount. There is no tax on the interest amount of your deposit and finally there is no tax on your maturity amount as well.
There is no fear of losing money due to the government scheme
For such people who want fixed returns on their investment, PPF is the best investment option. Due to its attractive interest rate, many people include PPF in their retirement planning. Since this small savings scheme is supported by the government, investing in it is considered safe. There is no fear of losing your hard-earned money in it.
The investment matures in 15 years
Financial advisors say that it is wise to include PPF in retirement planning. This is because the fluctuations in the stock markets affect the returns of the equity schemes of mutual funds. However, the fluctuations in the stock market do not affect your investment in PPF. Investors only have to keep in mind that the money in PPF matures in 15 years.
