The stock markets are rising to unheard of heights and everyone wants to jump on that particular bandwagon to make a lot of money. However, they are choosing a path of high risk and not everyone can take that road to success. Risk means you may suffer a huge loss and that may affect your family’s current lifestyle. For most people with salaries, there are much safer options available. First of all there is the Employees’ Provident Fund (EPF). But this is something that most employees already have. You can open one at the nearest bank. And then there is the Public Provident Fund (PPF). This is a voluntary savings vehicle that is open to everyone. However, there are various strategies that you can grab to make sure you manage to get PPF to pay huge sums to you. The PPF calculator will show you how.
Let us say that a PPF subscriber invests Rs 9000 every month and keeps doing so in a disciplined manner for 15 years. PPF interest rate is 7.10% and the PPF calculator shows that this person will get a sum of Rs 29,29,110 on maturity.
This is definitely a great return and it shows how compounding returns can really build wealth for the investor. And remember, there are no risks being taken. Just focus and discipline is required.
PPF trick
However, there is a PPF trick that most subscribers must adopt. Instead of withdrawing their PPF money on maturity after 15 years, it would be better to leave the money where it is. Over and above that, the investor should actually extend the PPF account for 10 years – this has to be done in a batch of 5 years. And not just 25 years, the PPF extension can be done indefinitely.
What will the benefit translate into after 25 years of disciplined investment? The extra period will lead to more than doubling of the money! While after 15 years the man was getting just over Rs 29 lakh earlier, by extending his PPF account twice, he received a splendid sum of Rs 74,21,770.78. The only thing was that extra time was required.
Imagine the massive returns if further extensions are asked for?
Note: Do understand that the sums mentioned here are estimations and the actual amount will be available in the PPF passbook.
PPF calculator number crunching exercise shows how a subscriber can make his small contributions balloon into something magnificently larger. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
