Investing in the government scheme PPF can help you accumulate a substantial sum. This is a scheme that can make you a millionaire in the long run and also offers tax benefits.
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Post Office Scheme: Several government schemes are run under the Post Office, one of which is the Public Provident Fund (PPF). This is a scheme that can make people millionaires, but regular investments are required. It has long been an attractive interest-paying scheme, and it also offers tax benefits. Let’s learn more about this scheme and how you can earn a substantial amount every month by investing in it.
PPF is an excellent investment option. You can adopt a 15+5+5 investment strategy and accumulate a corpus of ₹1.03 crore over 25 years. The interest earned on this amount can generate ₹61,000 per month.
Interest in PPF Scheme
The Public Provident Fund offers an annual interest rate of 7.1%. By investing in PPF, tax exemption of up to Rs 1.5 lakh can be claimed under Income Tax Act 80C, which reduces the tax.
How can you become a millionaire with the PPF scheme?
If you also want a substantial sum in your retirement, the PPF (Public Provident Fund) 15+5+5 strategy could be an excellent plan for you. The minimum maturity period for this scheme is 15 years. If you invest in PPF for 15 consecutive years and then take two five-year extensions, you can build a corpus of approximately ₹1.03 crore in 25 years. This corpus can earn you approximately ₹61,000 per month.
By depositing ₹1.5 lakh every year for the first 15 years (15 x ₹1.5 lakh), you will invest ₹22.5 lakh. At an interest rate of 7.1%, the corpus grows to ₹40.68 lakh after 15 years. This will generate ₹18.18 lakh in interest. After this, if you leave this amount for another five years without making any new investments, you will accumulate Rs 57.32 lakh after 20 years, of which Rs 16.64 lakh will be earned through interest. If you keep this amount for another five years, the total will be Rs 80.77 lakh. Of this, Rs 23.45 lakh will be the extra amount earned from your savings. However, if you continue adding Rs 1.5 lakh annually for 10 more years, the total amount will reach Rs 1.03 crore.
Pension of Rs 61,000
After completing 25 years, you can continue to maintain a fund of Rs 1.03 crore in your PPF account. This amount will earn you 7.1% interest every year. At 7.1% interest every year, you will accumulate approximately Rs 7.31 lakh, which means you can earn approximately Rs 60,941 per month. The important thing is that your original fund of Rs 1.03 crore will remain the same.
Who should invest in PPF and when?
Anyone can invest in this government scheme at any time and receive a substantial amount. If a minor wants to invest, they can do so with the help of their parents. The minimum amount required to open an account is Rs 500. You are not allowed to open a joint account; you can only open individual accounts.
