Is your neighbour richer than you? He shows off his wealth every day and you are left rubbing your hands? Do you always keep thinking about how to take revenge on him in terms of money? If you think of all these things and you are not able to think of any solution, then there is nothing to worry about.
You can complete your revenge by depositing money in PPF i.e. Public Provident Fund. The best formula to deposit money in PPF is 15+5+5. If you deposit money in PPF on this formula, you will become the owner of at least Rs 1 crore. It is a safe and long-term investment, which gives you financial independence.
What is PPF
Public Provident Fund (PPF) is an excellent means of saving for a long time and getting safe returns. It comes with a government guarantee and offers many benefits of tax exemption. With the right strategy and patience, it is possible to become a millionaire using PPF. Here we will tell you how it works through the 15+5+5 formula. This scheme empowers you financially.
Who can invest in
Indian citizens
Any Indian citizen can open his personal PPF account.
Parents or legal guardians can also open a PPF account for their minor child and deposit money in it.
An individual can open only one PPF account in his name.
Investment for minor
Parents or guardians can open a PPF account in the name of their minor child.
Both parents together can deposit a maximum of Rs 1.5 lakh in the child’s account and in their own account.
Old accounts will continue
Currently, opening a new PPF account for HUFs is not allowed. However, old accounts opened before 2005 can continue till the completion of their term.
15+5+5 Formula of PPF
You can understand this formula of PPF in simple language. The basic tenure of a PPF account is 15 years. You can extend it multiple times for 5-5 years. Suppose, you have initially opened the account for 15 years, then you can extend it for two tenures of 5-5 years.
Thus, if you continue this for 15 years + 5 years + 5 years i.e. a total of 25 years, you can create a fund of crores with the magic of compounding. This formula shows the importance of long-term investment.
How 15+5+5 Formula Works
If you are 25 years old and you start depositing Rs 1.5 lakh every year from this age, then your total investment in 15 years will be Rs 22.5 lakh. The current interest rate on PPF is around 7.1% per annum. As per the annual interest rate, your investment amount will grow to around Rs 40 lakh after 15 years.
Next, when you extend the account period by 5 years, the compounding effect of interest continues and your amount will grow to around Rs 66 lakh in the next 5 years. Next, when you extend your account for the second time for another 5 years, your fund can grow to Rs 1 crore or more due to the power of compounding. Thus, in 25 years you can become a crorepati. This formula leads you to financial success.