Public Provident Fund (PPF) is a good investment option for those seeking a long-term risk-free retirement corpus. A PPF account can be opened at most bank and post office branches across India. PPF is a safe and tax-free option for investment, which guarantees fixed returns in the long term.
PPF is a government-backed scheme, currently offering an interest of 7.1%, which can help you create a large fund over time through compounding. The investment period in PPF is 15 years, which can be extended in blocks of 5 years each.
A minimum of Rs 500 and a maximum of Rs 1.5 lakh can be invested annually, which is tax-exempt under Old Tax Regime and is also tax-free on maturity. If a person deposits Rs 1.5 lakh every year, one can create a fund of about Rs 40 lakh in 15 years and up to Rs 1 crore in 25 years.
Therefore, it is an investment with safe and guaranteed returns, which can be beneficial for long-term financial goals such as retirement planning.
Also read: Your EPF deposits to earn you fixed return? Here’s all you need to know about new proposal
Here’s a breakdown of the returns you can expect from monthly investments of Rs 1,000, Rs 5,000, and Rs 10,000 in PPF in a post office:
PPF corpus after 15 years with an investment of Rs 1,000 per month
Annual investment: Rs 12,000
Total investment over 15 Years: Rs 1,80,000
Interest earned: Rs 1,45,457
Maturity amount: Rs 3,25,457
PPF corpus after 15 years with an investment of Rs 5000 per month
Annual investment: Rs 60,000
Total investment over 15 Years: Rs 9,00,000
Interest earned: Rs 7,27,284
Maturity amount: Rs 16,27,284
PPF corpus after 15 years with an investment of Rs 10,000 per month
Annual investment: Rs 1,20,000
Total investment over 15 Years: Rs 18,00,000
Interest earned: Rs 14,54,567
Maturity amount: Rs 32,54,567
But if someone invests annually Rs 1.5 lakh, which is the maximum limit for investment under PPF, they can make a corpus of Rs 40.68 lakh in 15 years. Of this amount, Rs 22.5 lakh is invested amount and Rs 18.18 lakh interest.
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