PPF: Monthly savings of ₹ 12,500 will make 41 lakhs in 15 years, Know how

Are you planning to save or invest somewhere? Then there is important news for you. A Public Provident Fund (PPF) account is a risk-free investment and tax-saving scheme backed by the central government. This small savings scheme offers attractive long-term returns. Currently, the PPF interest rate stands at 7.1%. The maturity period of a PPF account is 15 years, but it can be extended indefinitely in intervals of 5 years. This quality makes it a great option for building a retirement corpus.

If you invest Rs 12,500 monthly in the Public Provident Fund (PPF), you can accumulate a handsome amount of around Rs 41 lakh over an investment period of 15 years.

How PPF Calculator Works

An investor can contribute a minimum of Rs 500 and a maximum of Rs 1.5 lakh in a financial year. Contributions can be made only once a month.

Monthly investment: Rs 12,500

Investment tenure: The tenure of a PPF account is 15 years, but you can extend it in intervals of 5 years.

Interest rate: The current PPF interest rate is around 7.1% per annum.

However, if the PPF account-holder takes advantage of the extension and also takes advantage of compounding for the next 15 years, he can earn Rs 1.5 crore in 30 years.

Safety: PPF is backed by the government, making it a safe investment option.

Tax benefits: The PPF scheme is quite popular among taxpayers. A major reason for its popularity is that PPF comes under the ‘exempt-exempt-exempt’ tax status.

PPF scheme is eligible for ‘EEE Tax Regime’. Under Section 80C of the Income Tax Act, PPF deposits up to Rs. 1.5 lakh in a financial year are eligible for tax deduction. Moreover, the interest received from the investment and the PPF maturity amount are also tax-free.