PPF Calculator: Generate ₹41 Lakh in 15 Years with Monthly Savings of ₹12,500

The Public Provident Fund (PPF) is a popular, risk-free, and tax-saving investment option backed by the government of India. By investing ₹12,500 per month, investors can accumulate around ₹41 lakh over 15 years, making it a great choice for building a retirement corpus or other long-term financial goals.

How It Works

Here's a breakdown of how investing in PPF with a monthly deposit of ₹12,500 can grow over time:

Monthly Investment: ₹12,500

Investment Period: 15 years

Interest Rate: Currently at 7.1% per annum (compounded annually)

Given these conditions, the investment grows due to compound interest over time, which results in a total of approximately ₹41 lakh at the end of 15 years.

Extending the PPF Account

PPF accounts can be extended in blocks of 5 years after the initial 15-year period. If an investor extends the account for another 15 years (totaling 30 years), the compounding effect could grow the corpus to about ₹1.5 crore.

Benefits of PPF Investment

• Government-Backed Security: Being a government-backed scheme, PPF is considered a highly secure investment.
• Tax Benefits: PPF follows the EEE (Exempt-Exempt-Exempt) tax regime. Under Section 80C of the Income Tax Act:
  • Deposits up to ₹1.5 lakh per year are eligible for tax deduction.
  • Interest earned and maturity amount are tax-free.
• Tax-Free Maturity: The entire maturity amount, including interest, is exempt from tax, providing substantial tax savings over the long term.

Summary

For investors looking to save consistently, PPF offers a blend of security, tax benefits, and wealth accumulation potential.