The Public Provident Fund (PPF) is a government-backed scheme designed to help you develop savings habits while investing for the long term. With a maturity period of 15 years, it’s a smart option for building a solid financial future. Most popular among salaried individuals, the PPF offers the dual advantage of being completely tax-free and giving you the power of compounding, even though interest rates haven’t increased significantly in recent years.
Now, let’s say your goal is to build a corpus of ₹25 lakhs through the PPF. How much do you need to save each month? Let’s break it down.
Maximum Deposit in PPF
The PPF is a small savings scheme available through post offices and several banks, currently offering a 7.1% annual interest rate. You can invest a maximum of Rs 1.5 lakh per financial year, while the minimum annual deposit is Rs 500. Over its 15-year tenure, your total contributions along with the accumulated interest will create a sizeable amount for your future.
PPF Calculator: How to build Rs 25 lakh corpus
At the current 7.1% annual interest rate, you would need to invest Rs 7,750 per month or ₹93,000 per year. Over 15 years, your total investment would amount to Rs 13.95 lakhs. Thanks to compounding, this would grow to Rs 25.22 lakhs, giving you a tidy interest gain of Rs 11.27 lakhs.
Maximize Your Savings
If you contribute the maximum allowed Rs 1.5 lakh per year (around Rs 12,500 per month), your total investment over 15 years would be Rs 22.5 lakhs. At the end of the term, your fund would grow to Rs 40.68 lakhs, with interest earnings of Rs 18.18 lakhs.
Tax-Free Perks
PPF falls under the “EEE” category, meaning both your deposits, interest earned, and the maturity amount are all exempt from taxes. Plus, you can even take a loan of up to 25% against your PPF balance after one year of completion!
Learn how to build a tax-free ₹25 lakh corpus with PPF, a secure long-term savings plan offering compounding benefits. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today