PPF Investment Scheme: People often think that having a large sum of money in the bank is necessary to become rich, but the reality is quite different. In fact, wealth creation doesn’t start with a large sum, but with small savings started at the right time. The government-guaranteed PPF scheme is the best example of this. If you save just ₹417 every day, this small amount can grow into a tax-free fund of more than ₹40 lakh. This is not magic, but the power of compounding, which, if used wisely, can fulfill big dreams.
What is the ₹417 method?
A maximum of ₹1.5 lakh can be invested in PPF in a year. If you divide this amount by the number of days in a year, the daily investment comes to approximately ₹411 to ₹417. This means that by saving approximately ₹417 daily, you can invest the full ₹1.5 lakh in a year. This translates to a monthly investment of approximately ₹12,500 and an annual investment of ₹1.5 lakh.
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How much will the fund grow in 15 years?
Let’s say you deposit ₹1.5 lakh every year in PPF for 15 years. During this period, your total deposit will be ₹22.50 lakh. At the current annual compound interest rate of approximately 7.1 percent, this amount can grow to approximately ₹40.68 lakh after 15 years. The special thing is that this entire amount is tax-free.
No need to stop after 15 years
The biggest advantage of PPF is that it is not necessary to close it after 15 years. You can extend it in blocks of 5 years. If you continue investing even after 15 years, this fund can reach approximately ₹65-66 lakh in the next 5 years. And if you continue it for 25 years, this amount can even reach around a crore rupees.
Why is PPF considered the safest investment?
PPF is considered a strong investment option because it is a completely government-backed scheme. The money invested goes directly to the government, so there is no risk of losing it. It also falls under the EEE category, meaning the investment is tax-exempt, the interest earned is tax-free, and the entire amount received at maturity is also tax-free.
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When is the right time to invest?
To get the full benefit of the interest in PPF, the money should be deposited before the 5th of every month. If you wish, you can also deposit the entire ₹1.5 lakh at once at the beginning of the year, i.e., between April 1st and 5th. This will give you the maximum interest for the entire year.
Small savings can lead to great wealth
If you can save ₹400-500 from your daily expenses, PPF can become a strong support for your retirement. Therefore, remember that the size of the investment is not as important as the consistency and duration of your investment.
