The Post Office Public Provident Fund (PPF) scheme is a safe and tax-free investment that can make you a millionaire. By harnessing the power of regular investments, you can achieve your financial goals in unprecedented ways. Today, we’ll tell you about PPF’s foolproof 15+5+5 strategy, which can help you accumulate a massive corpus of ₹1.03 crore in just 25 years and earn a guaranteed income of ₹61,000 every month.
Why PPF is the Safest
PPF is considered the best investment option because it is backed by the government, making it zero-risk. This scheme currently offers an annual interest rate of 7.1 percent, which is fixed and secure. The biggest advantage is that investments up to ₹1.5 lakh annually in PPF can be claimed as a tax deduction under Section 80C of the Income Tax Act. Furthermore, the interest earned and maturity proceeds are also completely tax-free. Any citizen of India can take advantage of this excellent scheme.
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What is the perfect 15+5+5 strategy
The minimum maturity period of the PPF scheme is 15 years. However, the magic strategy to become a millionaire in PPF is 15+5+5. This means that after investing regularly for 15 years initially, you can extend it by 5 years each time. This strategy allows you to continue investing for a total of 25 years.
Complete Process to Become a Millionaire
Suppose you deposit ₹1.5 lakh (the maximum investment limit in PPF) every year.
The First 15 Years
You will invest a total of ₹22.5 lakh, which will earn you approximately ₹18.18 lakh in interest.
Next 5 Years (Up to 20 Years)
If you continue investing, after 20 years you will have a huge corpus of ₹57.32 lakh, with additional interest of approximately ₹16.64 lakh.
Next 5 Years (Up to 25 Years)
If you deposit ₹1.5 lakh annually for 25 consecutive years, the total investment will be ₹37.5 lakh. At the end of this period, the total amount in your account will be ₹1.03 crore. Over this entire period, you will earn a handsome return of approximately ₹65.5 lakh in interest. This demonstrates the unprecedented power of compound interest.
Monthly Guaranteed Income from a ₹1.03 Crore Corpus
After building a corpus of ₹1.03 crore in 25 years, you can continue to earn only interest without closing your PPF account. If you earn the current annual interest rate of 7.1 percent on this entire amount of ₹1.03 crore, you will earn approximately ₹7.31 lakh in interest annually. This means you will receive a guaranteed income of approximately ₹60,941 per month. This monthly income will make you financially independent after retirement.
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