PPF Scheme: Everyone dreams of becoming a millionaire and securing their future financially. However, due to a lack of proper planning and investment knowledge, many people are unable to achieve this goal. If you are also looking for a safe and reliable scheme, where your money is completely safe and you also get great returns, then Public Provident Fund (PPF) can be a great option for you. This government scheme not only keeps your money safe but can also make you a millionaire in the long term.
More than ₹ 40 lakh in 15 years
If you deposit ₹ 12,500 every month in your PPF account, this amount becomes ₹ 1.5 lakh annually. This is also the maximum investment limit in PPF, which means you cannot deposit more than ₹1.5 lakh in a financial year. Currently, the annual interest rate on PPF is 7.1%.
If you invest continuously for 15 years at this rate, you will get a total of ₹40.68 lakh on maturity Your total investment will be ₹22.50 lakh and the interest income you will get on it will be ₹18.18 lakh. This shows how a disciplined monthly investment can help you build a large fund in 15 years.
How to get more than ₹1 crore in 25 years
The basic period of PPF is 15 years, but it can be extended in blocks of 5 years. That is, you can continue investing for a total of 25 years! This makes PPF a powerful long-term investment tool.
If you deposit ₹12,500 every month and continue it for 25 years, your investment will look something like this:
Total investment: ₹37.50 lakh
Total interest received: ₹65.58 lakh.
Total amount (on maturity): ₹1.03 crore
By investing just ₹37.50 lakh, you can create a large fund of ₹1.03 crore! This is a wonderful example of the power of compounding, where your money grows exponentially over time.
Why is it everyone’s favorite
PPF is considered one of the safest and most popular investment options in India, and there are many reasons for this:
Benefits of EEE Category
The biggest advantage of PPF is that there is no tax on investment, interest, and maturity amount! This scheme falls under the EEE (Exempt-Exempt-Exempt) category:
Exempt on investment
Exempt on interest
Exempt on maturity
Government
This scheme is completely run by the Government of India. This means that your money is 100% safe and there is no market risk.
Long Term Benefit
As we have seen, it is possible to build a corpus of Rs.1 crore with a 25-year plan, which will help you meet your long-term financial goals.
Compounding Interest
Interest is compounded on interest every year. This increases your returns exponentially over time.