In India, the Post Office’s Public Provident Fund (PPF) scheme has always been a popular investment option, offering security and good returns. This government savings scheme allows investors to accumulate a fund worth crores of rupees by depositing money over a long period. The best part is that this scheme not only offers an attractive interest rate but also provides tax benefits. If investors deposit money consistently and in a disciplined manner, building a large fund in the future is entirely possible.

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Why is PPF considered a safe and beneficial investment option?

The biggest advantages of investing in the Public Provident Fund are its government guarantee, stable interest rate, and tax exemption. Currently, PPF offers an annual interest rate of 7.1 percent. It also provides tax deduction benefits up to ₹1.5 lakh under Section 80C of the Income Tax Act. This scheme can be easily opened by any Indian citizen.

What is the PPF’s 15+5+5 investment strategy?

The basic maturity period of PPF is 15 years, but investors can extend it for periods of 5 years each. This is known as the 15+5+5 strategy, under which the account can be maintained for a total of 25 years. Continuing the investment for a longer period allows the benefit of compound interest to grow rapidly, resulting in a large corpus.

How can a fund of one crore rupees be created in 25 years?

If a person deposits ₹1.5 lakh every year, the total investment in the first 15 years will be ₹22.5 lakh. During this period, approximately ₹18.18 lakh in interest will be earned, bringing the total amount to around ₹40 lakh. If this amount is kept invested for the next 5 years without withdrawal, it will reach approximately ₹57.32 lakh in 20 years. Continuing the account for another five years will bring the total amount to around ₹80.77 lakh. If an investor continues to deposit ₹1.5 lakh every year for the entire 25-year period, the total fund can grow to approximately ₹1.03 crore. This amount is completely secure, providing financial security and helping to achieve major financial goals in the future.

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Interest and monthly income will continue even after 25 years

The PPF account can be extended even after 25 years. If a fund of ₹1.03 crore has been accumulated by then, it can generate an annual income of approximately ₹7.31 lakh at an interest rate of 7.1 percent, which translates to about ₹61,000 per month. This proves to be a strong and stable retirement income option.