PPF is the way to retire rich, secure future

Want to retire rich? You may be earning in lakhs but come month-end and you will not have a single penny in your pocket. Sounds familiar? Yes, we all face the same situation no matter how fat our pay cheque is in the beginning of the month. It is often said: Little drops of water make a mighty ocean. Here's your way to save up for a secure future.

The government of India has brought in a welcome change with respect to what is called Public Provident Fund. The popular savings scheme called as PPF also gives you a tax exemption. What more, the interest earned too is not taxable!

According to the latest notification, People can now deposit up to Rs 1.5 lakh annually in their Public Provident Fund. PPF is a 15-year investment scheme which reaps an interest of 8.7 % (2014 figures).

Let's know more about this...

• PPF is a long-term investment option for investors of all types. It is also the safest saving scheme as it is backed by the government.
• You can open a PPF account at your nearest General Post Office or any nationalised banks that offer the facility. State Bank of India, Central Bank of India, Bank of Baroda and Bank of India are some of the banks that offer this facility.
• The initial investment could be as low as Rs 100
• The minimum deposit for a PPF account is Rs 500 per year while the maximum revised limit is Rs 1.5 lakhs per annum. You could deposit a lump-sum amount or in easy installments at regular intervals
• Interest is compounded annually and credited on March 31 each year.
• You can withdraw amount in your account only upon maturity. However, in case of emergencies banks permit partial withdrawals. You can even withdraw once a year from 7th year onwards. However, the amount cannot exceed 50% of the total amount. Most importantly, you can close a PPF account only in case of death
• PPF amount qualify for a deduction under Section 80 C. Both the maturity and the interest earned are exempted from tax. Besides, no wealth tax is applicable on PPFs
• Guess what? You can even apply for a loan with the surety of your PPF deposit. You are eligible to take loan from the third year till the sixth year.
• At the end of 15 years, you have the option of continuing the PPF accounts. The amount will continue to earn interest till the closure of your account.

So what are you waiting for? Now that you know the secret to making wealth, start saving. You never know the need arises.