If you’re looking to accumulate a substantial corpus by the time you retire, the Public Provident Fund (PPF)’s 15+5+5 investment strategy could be the most powerful strategy for you. This plan comes with a minimum maturity period of 15 years. If you deposit money consistently for 15 years and Business Idea: Start These 4 Businesses With Low Investment, Then Earn Big Every Month” extend the account twice (for five years each time), you can build a massive corpus of approximately ₹1.03 crore in just 25 years. This massive corpus will provide you with a steady income of approximately ₹61,000 each month.
Why is PPF special
PPF currently offers an excellent annual interest rate of 7.1%, which increases at a compounding rate. The biggest attraction of this scheme is that the amount deposited in it is eligible for a tax deduction of up to ₹1.5 lakh per year under Section 80C of the Income Tax Act. Furthermore, the interest earned and the entire amount withdrawn after 25 years are completely tax-free. This is called the ‘EEE’ (Exempt-Exempt-Exempt) benefit, making it an excellent investment option.
How to accumulate ₹1.03 crore
This millionaire-making strategy works in three stages and delivers impressive results.
Phase 1 (Initial 15 Years):
You deposit a maximum of ₹1.5 lakh (i.e., ₹12,500 per month) every year for the first 15 years. This brings your total investment to ₹22.5 lakh. At an interest rate of 7.1%, this amount will grow to approximately ₹40.68 lakh by the end of 15 years. During this period, ₹18.18 lakh will be added to your account as net interest.
Step 2 (Next 5-Year Extension):
Don’t close the account after 15 years, but instead extend it for another 5 years. You can opt out of making any new investments during this period. Your ₹40.68 lakh will continue to earn interest. By the end of the 20th year, your total amount will grow to approximately ₹57.32 lakh! An interest of ₹16.64 lakh will have been added to this.
Step 3 (Final 5-Year Extension):
If you want to build an extraordinary corpus, extend the account for another 5 years while continuing to invest ₹1.5 lakh every year. This is the most powerful step. By following this strategy, after 25 years, your total corpus will reach the magical figure of ₹1.03 crore!
How will you earn ₹61,000 every month
At the end of 25 years, when your PPF account has accumulated a massive corpus of ₹1.03 crore, don’t withdraw it immediately. If you keep this original corpus in the account and continue with 5-year extensions, it will continue to earn interest at the rate of 7.1% per annum.
Calculating 7.1% annual interest on ₹1.03 crore, it comes to approximately ₹7.31 lakh per year. If you divide this annual interest monthly, you will earn approximately ₹60,941 per month. The most exciting thing is that you will continue to withdraw this amount every month, while your original deposit of ₹1.03 crore will always remain safe in the account. It will provide you with a great income stream throughout your life.
Who can apply, and what are the account opening rules
This groundbreaking Gas Cylinder: Why Was the Number of Subsidized Cylinders Reduced? Government Explains the Reaso scheme is open to every Indian citizen. Any adult can start investing at any time. If a minor wishes to invest, they can open an account with the help of their parents or legal guardian. A minimum deposit of ₹500 is required.
An important rule of PPF is that you can only open an individual account; joint accounts are not permitted. You can open your PPF account at any post office or government/private bank and start taking advantage of this safe and beneficial scheme today.
