PPF Account If you have a Public Provident Fund (PPF) account, it can make you a millionaire. For this you will have to spend around Rs 417 per day. Let us tell you what is the complete calculation
Public Provident Fund (PPF Account) is a long-term investment tool, which can prove to be a better investment option for any investor. This enables an investor to meet his financial requirements even after retirement. As per the PPF rules, an investor can open a PPF account in any bank or nearest post office by depositing Rs 100 in his PPF account.
If a person maintains the discipline of investing, he/she can become a crorepati at the time of maturity of the PPF account. Let us know how this will be possible.
What is the basic rule of PPF account
If you have an account then it is necessary to deposit minimum 500 per year in PPF account. The PPF account has a lock-in period of 15 years, wherein the earner can deposit up to Rs 1.5 lakh in a single deposit or in a maximum of 12 installments in a financial year.
How beneficial PPF account for you
The PPF account falls under the EEE category, where the individual can claim income tax benefits under Section 80C on his deposits up to Rs 1.5 lakh annually. Apart from this, tax exemption is also available on PPF maturity amount. The interest rate on PPF is 7.1 percent and it is given on a quarterly basis.
The maturity period of the PPF account is 15 years, but investors can continue with the PPF without withdrawing the maturity amount. The investor has the option to extend his PPF account for another 5 years even after maturity.
You can extend the term of the account even after maturity
PPF account holders can carry forward their account with investment option. When the term of your PPF account is over, you should choose the re-investment option instead of withdrawing the money. With this, you get interest on both the PPF maturity amount and its investment. If a person does this then he can also become a millionaire with this investment.
PPF Calculator
If an earning person opens a PPF account at the age of 30 years and extends his PPF account three times, then in that case the PPF account holder will be able to invest in the PPF account for 30 years. Suppose an investor invests Rs 1.50 lakh per year in PPF account, then after 30 years of investment, he will get approximately Rs 1.54 crore based on the current interest rate of 7.10 percent on PPF.
Based on the calculation from the PPF calculator, if you invest 1.5 lakh every year in 30 years of investment, then this amount becomes 45 lakh (1.5 lakh x 30). After maturity, you invest this amount. In this case, the total interest received on it becomes Rs 1,09,50,911.
