New Delhi: PPF investors can use the government savings scheme to use the power of compounding and grow their returns manifold so that they can enjoy wealth and may even take a break from their work life. Public Provident Fund or PPF offers 7.1 per cent returns. However, don’t be fooled by this interest rate since there’s more to PPF than meets the eye. PPF is one of the few government schemes that are exempt-exempt-exempt on investment, earning interest and withdrawal.
However, PPF is not just about tax exemption but also about wealth creation. Here, we will explain to you how you can invest as little as Rs 7,500 and grow it into a major corpus of Rs 1 crore over the years.
How to grow Rs 7,500 PPF investment into Rs 1 crore
If you invest Rs 7,500 per month in PPF, it amounts to Rs 90,000 per annum.
This amount will grow to Rs 13,50,000 in 15 years, earning an interest of over Rs 10.9 lakh.
If you extend PPF investment by 5 years, the principal will grow to Rs 18 lakh while the interest will be worth RS 21.94 lakh, taking the total to Rs 39.94 lakh.
Another 5-year PPF extension will grow your regular Rs 7,500 per month investment into Rs 61.84 lakh.
A 30-year investment in PPF will grow your Rs 7,500 per month into Rs 92.70 lakh.
Another 5-year extension can make your money grow to Rs 1.36 crore.
However, your money will grow into Rs 1 crore in the very 1st year of a 5-year extension, i.e., after 31 years.
Faster way to become crorepati using PPF
If you aim to grow your money faster, try investing Rs 12,500 per month in PPF.
If you invest Rs 12,500 per month in PPF continuously for 15 years, starting from the age of 30, it will grow into a total corpus of Rs 40.48 lakh.
Out if this, your principal will be worth Rs 22.50 lakh.
The interest earned is Rs 18.18 lakh over a 15-year period.
However, to grow this amount into Rs 1 crore, don’t withdraw this sum yet.
Keep the money invested in PPF for another 5 years. If you continue to invest more, you will have Rs 30 lakh principal with interest earned worth Rs 36.58 lakh.
Investing for another 5 years will grow your principal to Rs 37.50 lakh and the interest to Rs 65.58 lakh. At the end of 25 years, you will have grown an investment of Rs 12,500 per month into
a whopping Rs 1 crore.
These calculations are based on assumption that you are a regular investor who has a significant runway to invest and grow money using PPF. Actual returns may vary since the government notifies the PPF interest rate on a quarterly basis.
(Disclaimer: This article is meant for information purposes only. News9 does not provide advice regarding investment in any schemes or the stock market. Consult a certified financial advisor for assistance in financial planning.)
PPF calculator: Salaried taxpayers can follow discipline and invest a fixed sum to grow their corpus into Rs 1 crore over an extended time period. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
