5 PPF tips that will turn you into a crorepati with Rs 1.5 lakh

5 PPF tips that will turn you into a crorepati with Rs 1.5 lakh

The Public Provident Fund is mostly ignored by most professional money-managers except for its income tax benefits. However, like most investments, it is a magnificent money-maker over a longer period of time for the general public. PPF is a long-term savings scheme in India, known for its tax benefits and safety. Given proper discipline by the PPF account holder and enough time to let the magic of compounding do its thing, the person will end up as a crorepati. Here we list 5 PPF tips on how an investor can turn into a crorepati.

1. Start your PPF journey as early as possible

The earlier you start investing in PPF, the more time your money has to grow due to the power of compounding and high PPF interest rate. Not only will you be able to take full advantage of the 15-year maturity period, but also an indefinitely extended period. For that, you need to invest consistently through the years. Preferably this should be a lumpsum in the beginning of the fiscal. However, even small, monthly contributions over a long period will add up to a big sum.

2. Take full advantage of the entire PPF limit allowed

PPF has an annual limit. An investor can invest up to Rs 1.5 lakh in a PPF account. That way, the investor will get the highest interest rate possible. Plan deposits to optimize interest accumulation and that means, putting up the money in the first couple of days of the month.

3. Use Income Tax Benefits to the full

Under Section 80C, all contributions to your PPF account are eligible for tax deduction. In effect, this will reduce your taxable income. And, the cherry on top is that the interest earned on PPF is tax-free.

4. Keep an eye on your PPF Account

While, there is no problem about the safety of the funds, a PPF investor must check whether any mistake has been made in giving interest. Mistakes often happen.

5. Make sure you appoint a nominee

In case anything happens to the PFF account holder, the nominee will be able to get the funds. Otherwise it becomes almost imposisble to do so due to various bureaucratic hassles.

These 5 tips will ensure you end up a crorepati. Let us take an example. 

How to become a crorepati

Let us assume that a PPF investor contributes Rs 150000 yearly in a disciplined manner and continues doing so for 25 years. With the PPF interest rate of 7.1%, this will transform into a massive amount: Rs 1,03,08,014.97. 

The investor would become a crorepati.

Note: The sums mentioned here are estimates and the actual amounts will be provided in the PPF passbook.

 5 PPF tips that will turn you into a crorepati: Yes, that is possible if the PPF account holder follows these tips.  Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today