How To Ccalculate PPF Investment?
Want your money to grow quietly but powerfully? Investing The maximum ₹1.5 lakh every year in a Public Provident Fund (PPF) could turn it into a whopping ₹40.68 lakh over 15 years, assuming the current 7.1% interest rate stays steady.
Think of it as your financial “slow cooker”, low effort, long patience, and a rich payoff! The magic? Compounding interest and tax-free growth, all backed by the government. Whether you deposit monthly or as a lump sum, starting early makes your future self smile. So, are you ready to let your money work while you sleep? Here is how you can calculate the fund..
How Much Will Your PPF Grow in 15 Years at 7.1% Interest?
| Parameter | Details |
|---|---|
| Annual Investment | ₹1,50,000 |
| Investment Tenure | 15 years |
| Total Principal Invested | ₹22,50,000 |
| Total Interest Earned | Approximately ₹18,18,209 |
| Estimated Maturity Amount | Approximately ₹40,68,209 |
| Interest Rate Assumption | 7.1% p.a. (compounded annually) |
| Note | Value may fluctuate as interest rates are revised quarterly by the Ministry of Finance |
The PPF Scheme has its important characteristics.
1. Protective and Governmental Support
Public Provident Fund (PPF) is a government-sponsored savings scheme, thus it is one of the secure investments made in India. Your interest rate and principal are safe, and the scheme is supported by the full backing of the government, making it virtually risk-free compared to instruments which are linked to the market.
2. Interest Rate
PPF at present provides an annual interest rate of 7.1% per annum. The interest is calculated on the lesser balance in your account between the 5th and the last day of each month. Although the rate is reconsidered every quarter, it has been paying consistent returns that are greater than traditional fixed deposits.
3. Tax Benefits
PPF is very tax-efficient and belongs to the Exempt-Exempt-Exempt (EEE) group:
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Investment Deduction: Under Section 80C of the Income Tax Act, deductions can be made on contributions up to ₹1.5 lakh in a financial year.
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Tax-Free Interest: All the interest accrued during the period is completely free of income tax.
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Tax-Free Maturity: Your maturity lump sum is also tax-free, making it an excellent means of building long-term wealth.
4. Maturity Period
A PPF account has a standard lock-in period of 15 years, beginning at the end of the financial year during which the account was opened. Once it has matured, you can renew the account in five-year blocks, giving you more time to accumulate money with compounded interest.
5. Flexible Contributions
Although you can contribute a maximum of ₹1.5 lakh a year, you may invest either as a lump sum or as regular payments based on cash flow. The best practice is to deposit before the 5th of every month to maximize interest, as PPF calculates interest on the lowest balance of the month.
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