For the common man, a Public Provident Fund can perform nothing short of miracles. Considering that a PPF account holder will probably have a job to go to on a daily basis and not have enough time to spend on trying to find the best investment opportunities, a PPF account is the best solution to earn money on their capital saved. It will keep making money even as the account holder sleeps. And this will continue year after year and well into the decades ahead.
And after that, if investing is being done diligently, the PPF account holder can even become a crorepati. Yes, it can return even Rs 1 crore to the account holder. That is very much possible and it is not a daydream and every PPF account holder can achieve this status. This is because of the high PPF interest rate. It will also require the account holder to invest Rs 150,000 year after year right from the very beginning, when the financial year starts.
Let us assume that a person starts investing in a PPF account in the first week of April of a given year. The amount invested is Rs 1.5 lakh. And the same amount is invested over the next 25 years without any break. The end result will definitely be as shocking for the PPF account holder as it will be delightful.
However, do remember that investment continuity must be maintained and no withdrawals from the PPF account should be made.
Also, remember that the initial term for a PPF account is 15 years and the account holder will have to extend the period twice in a block of 5 years each.
At the end of 25 years, the PPF account holder will have invested as much as Rs 37,50,000. That is a massive sum in itself, but it is not crorepati material.
However, if you calculate with a PPF interest rate of 7.1% on this sum over a 25-year period, you get the princely sum of Rs 1,03, 08,015! This is possible because of the compound interest benefit that the PPF account holder has received.
And the amount received in interest? Rs 65,58,015!
Oh yes, and one more thing – make sure a nominee is appointed. In case of the unfortunate demise of a PPF account holder, it will become very easy for the heirs to access this money. Otherwise a huge number of problems will have to be faced by them
Yes, a PPF account holder can become a crorepati with an investment of Rs 150000. And Rs 1 crore is possible with a PPF interest rate of 7.1%. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
