The Post Office's Public Provident Fund (PPF) scheme offers salaried individuals and business owners an opportunity for secure long-term investment and tax savings. Consistent investment in this scheme can build a fund of ₹1.03 crore in 25 years, potentially providing a regular monthly income of approximately ₹61,000.
PPF Scheme: The government Post Office scheme, PPF (Public Provident Fund), is a reliable option for salaried individuals and business owners to secure regular income and tax savings post-retirement. If an investor invests ₹1.5 lakh annually for 25 years, the total fund can reach up to ₹1.03 crore at an annual interest rate of 7.1%. This fund ensures a monthly income of approximately ₹61,000, while the principal amount remains secure.
Features of the PPF Scheme
Individuals investing in the PPF scheme receive long-term benefits. Currently, this scheme offers an annual interest rate of 7.1 percent on investments. Furthermore, investments in PPF are eligible for tax exemption benefits up to ₹1.5 lakh under Section 80C of the Income Tax Act. This means you gain tax savings alongside your investment.
This scheme is beneficial for children, salaried individuals, and business owners alike. Anyone can start investing in this scheme at any time. The greatest feature of PPF is its potential to make an investor a millionaire over the long term.
Investment Strategy and Building a ₹1.03 Crore Fund in 25 Years
If an investor deposits ₹1.5 lakh annually into a PPF account for 15 years, the total investment will be ₹22.5 lakh. At an annual interest rate of 7.1%, the total amount will grow to ₹40.68 lakh after 15 years, which includes ₹18.18 lakh in interest.
Subsequently, if this amount is kept in the account for the next 5 years without any new investments, it will grow to ₹57.32 lakh. During this period, an additional interest of ₹16.64 lakh will be added. Allowing it to grow for another 5 years will bring the total fund to ₹80.77 lakh, including an additional interest of ₹23.45 lakh.
If the investor continues to invest ₹1.5 lakh annually for the entire 25 years, the total fund will eventually reach ₹1.03 crore.
Option for Monthly Income
The fund accumulated in PPF after 25 years will continue to earn an annual interest of 7.1%. At this rate, you will receive an annual interest of ₹7.31 lakh. Viewed as a monthly income, a regular earning of approximately ₹60,941 is possible. The most significant aspect is that your principal fund of ₹1.03 crore will remain secure, and the interest income will continue.
Why the PPF Scheme is Beneficial
The PPF scheme is a secure long-term investment option. It not only helps investors ensure income after retirement but also has the potential to convert small savings into a large fund. Due to its tax exemptions and secure interest rate, this scheme is very popular among investors.
Who Should Invest
The PPF scheme is suitable for everyone. Salaried individuals, business owners, independent professionals, and even children can invest in this scheme. Under this, anyone can achieve good returns over the long term through monthly or annual investments.
