New Delhi: If you have spare funds, you can use them to earn extra income without any hassle. By investing up to ₹1.5 lakh annually, you can generate substantial returns. The Public Provident Fund (PPF) is an excellent option for this purpose. Unlike the stock market, the PPF scheme is not subject to market volatility.
It comes with a government guarantee. Additionally, leaving your money invested for the long term allows you to benefit from the power of compounding. Currently, the government offers an annual interest rate of 7.1% on PPF investments. If you are looking to boost your financial prospects, this scheme presents a golden opportunity. You can learn more about the key details of the PPF scheme in the article below.
How much of a fund will be created in 15 years?
The standard tenure for a PPF account is 15 years. If you deposit ₹1.5 lakh annually during this period, your total investment will amount to ₹22.50 lakh. With an interest rate of 7.1%, you would earn approximately ₹18.18 lakh in interest.
How much money will you get in two decades?
You can continue your PPF account even after the initial 15-year term expires. It can be extended in blocks of 5 years. For instance, if you invest ₹1.5 lakh annually for 20 years, your total principal investment would be ₹30 lakh. Assuming a constant interest rate of 7.1% throughout this period, the total corpus could grow to approximately ₹66.58 lakh after 20 years. While your total investment is ₹30 lakh, the interest component adds roughly ₹36.58 lakh to the total.
Over ₹1 crore in 25 years
The 25-year investment scenario is particularly compelling. By investing ₹1.5 lakh annually, you would deposit a total of ₹37.50 lakh over 25 years. If the interest rate remains at 7.1% throughout the tenure, the total corpus could reach approximately ₹1.03 crore. This offers a fantastic opportunity for investors to significantly grow their wealth. Find out the best time to deposit money.
The PPF scheme is an excellent option for you. Interest calculations are based on the lowest balance in the account between the 5th and the end of the month. If you plan to deposit the full annual limit of ₹1.5 lakh, investing before the 5th of the month works to your advantage. Depositing the entire amount in a lump sum every year can be difficult; however, you can also deposit the money in instalments throughout the year. It is crucial to keep the annual limit of ₹1.5 lakh in mind.
