PPF Calculator: PPF has long been considered one of the safest savings schemes in India. It is especially preferred by working people because it helps build a stable and secure corpus for the future and retirement. It comes with a government guarantee, so there’s no risk to the money invested. Interest rates have remained relatively stable for many years, yet PPF’s popularity hasn’t diminished because the returns are completely tax-free, and the amount grows rapidly over time due to compounding. Furthermore, market fluctuations have no impact on this scheme.
How much will the corpus be created in 15 years?
PPF currently offers an annual interest rate of 7.1 percent. If an investor deposits the maximum limit of ₹1.5 lakh every year, the total corpus reaches approximately ₹40.68 lakh after 15 years. Of this, more than ₹18 lakh is earned solely as interest, and importantly, this interest is completely tax-free. This is a major advantage for those seeking a safe investment, as it provides guaranteed growth without any risk.
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Compounding will increase the investment amount
The most significant feature of PPF is its compounding interest power. In this scheme, interest earned each year is added to the next year’s deposit, allowing the total amount to earn interest again. This process continues for 15 years, resulting in a larger-than-expected increase in the final amount. The PPF interest rate has remained at 7.1 percent since April 2020, making the benefits of compounding even more visible during this period. Due to the tax exemption, this scheme has been placed in the EEE (Exempt-Exempt-Exempt) category, making it even more attractive.
How easy is it to open a PPF account?
PPF accounts can be easily opened at any government or private bank, or post office. Any Indian citizen can open it in their own name or in the name of their minor child. Documents such as identity proof, address proof, PAN card, nominee form, and photograph are required to open the account. A minimum annual deposit of ₹500 and a maximum of ₹1.5 lakh can be made. This amount can be deposited in one go or in multiple instalments throughout the year. If the interest rate remains at 7.1 percent and the investment is continued, the investor can earn over ₹18 lakh in interest over 15 years.
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Understand the calculation
If an individual deposits ₹1.5 lakh annually in PPF, the total investment over 15 years is ₹22,50,000. The interest earned at a constant rate of 7.1 percent per annum brings the total investment to ₹40,68,209. This growth is considered completely safe as it is not affected by any market volatility, and the interest is completely tax-free. Therefore, PPF has become the first choice for people looking for safe and reliable long-term investments.