Post Office PPF Scheme: The Post Office Public Provident Fund (PPF) scheme is widely regarded as one of the most reliable long-term investment options in India. With disciplined, continuous investing, this scheme can help an investor build a crore-plus corpus. The key lies in patience, consistency, and the right Strategy. Here, we explain how you can create substantial wealth through PPF using a long-term investment plan.
Why PPF Is a Strong Investment Option?
PPF is backed by the government, making it a safe, low-risk investment. Currently, the scheme offers an annual interest rate of 7.1 per cent, compounded annually. In addition to wealth creation, PPF offers tax benefits: investments up to ₹1.5 lakh per year qualify for tax deduction under Section 80C of the Income Tax Act. Any Indian citizen can open a PPF account and start investing.
Understanding the 15+5+5 Strategy
To maximise returns, investors often follow the 15+5+5 Strategy in PPF. The account initially matures after 15 years, but it can be extended in 5-year increments. By extending the account twice, the total investment period becomes 25 years. This long duration allows compounding to work effectively and helps create a large corpus over time.
Investment Calculation Over 25 Years
If an investor deposits ₹1.5 lakh annually for the first 15 years, the total investment is ₹22.5 lakh. Over this period, the accumulated interest adds approximately ₹18.18 lakh, bringing the total corpus to a much higher level.
If the amount remains in the account for another 5 years without further investment, the corpus grows further due to compounding interest. By the end of 20 years, the total amount is approximately ₹57.32 lakh, including nearly ₹16.64 lakh in interest income.
Extending the account for an additional 25 years increases the total value to about ₹80.77 lakh, with a significant portion attributable to interest earnings. However, if the investor continues to deposit ₹1.5 lakh annually, including during the extension periods, the final corpus can reach approximately ₹1.03 crore at the end of 25 years.
Monthly Income From PPF After 25 Years
After 25 years, a PPF account can be continued, and the accumulated amount will continue to earn interest. If the corpus reaches ₹1.03 crore, an annual interest rate of 7.1 per cent yields approximately ₹7.31 lakh. This means the investor can earn approximately ₹60,941 per month in interest income while the principal remains intact.
Final Takeaway
The Post Office PPF scheme is ideal for investors who prefer safety along with steady wealth creation. With long-term discipline and the 15+5+5 Strategy, it is possible to build a crore-plus fund and generate a stable monthly income from interest. For those planning retirement or long-term financial security, PPF can be a dependable and rewarding option.