Post Office Scheme : Among the many government savings schemes offered by the Post Office, the Public Provident Fund (PPF) stands out as one of the most popular and reliable options. This scheme not only provides excellent long-term interest rates but also offers significant tax benefits. With consistent investment, the PPF can help you become a crorepati (millionaire) over time.
What Makes PPF So Beneficial?
The Public Provident Fund (PPF) offers both attractive long-term returns and tax savings. If you follow the 15+5+5 investment strategy, you can accumulate around ₹1.03 crore in 25 years. This corpus can then generate a regular monthly income of approximately ₹61,000.
Currently, the PPF offers an annual interest rate of 7.1%. Moreover, investments made in PPF qualify for tax deduction under Section 80C of the Income Tax Act, allowing you to save tax on investments up to ₹1.5 lakh per year. In short, PPF helps you grow your wealth and save taxes simultaneously.
How to Build a ₹1.03 Crore Corpus with PPF
Let’s break down how this wealth can be accumulated:
- If an investor deposits ₹1.5 lakh every year for 15 years, the total investment would be ₹22.5 lakh.
- At a 7.1% annual interest rate, the total amount after 15 years will grow to ₹40.68 lakh, which includes ₹18.18 lakh in interest earnings.
- If you do not withdraw and let this amount continue to earn interest for the next 5 years, it will grow to ₹57.32 lakh, adding ₹16.64 lakh in interest.
- Leaving it untouched for another 5 years will increase the fund to ₹80.77 lakh, with an additional ₹23.45 lakh in interest.
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However, if you continue investing ₹1.5 lakh per year for the entire 25 years, your total corpus will reach approximately ₹1.03 crore.
Earn ₹61,000 Monthly – Like a Pension
Once your PPF account matures after 25 years, you can continue to earn interest on the accumulated amount. At the 7.1% annual rate, you’ll earn about ₹7.31 lakh per year, which means a monthly income of around ₹60,941.
The best part?
Your principal amount of ₹1.03 crore remains completely safe. You can treat this as a pension-like income source without worrying about losing your savings.
Who Can Invest in PPF?
Anyone can open a PPF account — including salaried employees, business owners, and even minors (through their guardians). It’s a secure, government-backed investment scheme ideal for building long-term wealth while ensuring steady income and tax benefits.
