Why PPF Remains A Lucrative Investment Option For Married Couples?

In a recent announcement by the Ministry of Finance, it was stated that the interest rates for Public Provident Fund (PPF) accounts will remain unchanged at 7.1 per cent. Despite expectations of an increase in interest rates, couples are encouraged to continue their investments in PPF accounts as it remains a reliable long-term investment option.

Investing in a PPF account offers tax deductions under Section 80C of the Income Tax Act, with the interest earned and maturity amount being tax-free. Consider the following example to understand the potential returns from a 15-year investment plan:

Assuming both the husband and wife invest in their respective PPF accounts:

Husband's PPF account:

• Yearly investment: Rs 1,50,000
• Interest rate: 7.1 per cent
• Investment tenure: 15 years
• Total maturity value: Rs 40,68,209

Wife's PPF account:

• Yearly investment: Rs1,50,000
• Interest rate: 7.1 per cent
• Investment tenure: 15 years
• Total maturity value: Rs 40,68,209

Combined maturity value from both accounts: Rs 81,36,418

Furthermore, the investment in PPF accounts can be extended for an additional five years. If both the husband and wife decide to continue investing, the maturity value in each account would be Rs 66,58,288, with a combined maturity value of Rs 1,33,16,576.

This example highlights the potential of accumulating substantial wealth through the power of compounding over an extended period. It emphasizes the importance of consistent and long-term investments rather than sporadic investments over a shorter duration, which may not yield desired results or help achieve ambitious wealth goals.