PPF Calculator: Public Provident Fund (PPF) is one of the high yielding income tax saver option, which is 100 per cent risk-free. Currently, PPF interest rate is 7.1 per cent but it’s announced on quarterly basis by the Government of India (GoI). So, the PPF interest rate may change in future but for those who have low risk appetite, PPF is one of the most favoured assured guarantee return investment tool. According to tax and investment experts, if invested in a smart manner, one can become a crorepati by choosing monthly investment mode and availing the PPF account extension facility after the maturity period of 15 years.
A cut in interest rate means, your PPF balance will earn 0.8 per cent less than earlier and as the compounding of interest in PPF is done on annual basis, the impact on your PPF maturity amount could be huge.
Looking to get Rs 1 crore as returns from Public Provident Fund (PPF) investments? To achieve this goal, investors need to be patient and regularly invest for 25 years at the current interest rate of 7.1 percent, utilizing the maximum limits of PPF investments allowed in one financial year, according to calculations provided by Groww — an investment platform.
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Periodic investments in PPF for a long-term can do the trick with the power of compounding. Longer the money stays invested, the quicker it grows, experts say.
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As per calculations, if someone starts investing Rs 12,500 per month (the maximum monthly investment that can be done in PPF) and continues the PPF account till 15 years, he may earn over Rs 43 lakh at the time of maturity (in accordance with the current 7.1 percent rate of interest).
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Now, the same account can be extended within one year of maturity for further five years and so on to earn more benefits. After investing Rs 1.5 lakh per year for 20 years ( first extension) at 7.1 percent, the PPF account balance will be about Rs 73 lakh.
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Now, in order to get Rs 1 crore, the investor needs to extend the account for further five years (second extension). After investing Rs 1.5 lakh per year for 25 years at 7.1 percent, the PPF account balance will be Rs 1,16,60,769 (which is more than 1 crore).
