PPF Calculation: How much will you earn in 20 years by investing Rs 4,000, Rs 8,000, and Rs 12,000 monthly in Post Office Public Provident Fund?
Public Provident Fund is well-known for its guaranteed returns and tax benefits on up to 1.5 lakh investments in a year under Section 80C of the Income Tax Act. Any individual, including those who are employed, self-employed, or pensioners, can open a PPF account. You can open a PPF account at either a post office or a bank. Both options have the same rules and benefits.
The government backs the Post Office Public Provident Fund, offers tax benefits, and guarantees returns, helping to secure your financial future. Currently, it is offering an interest rate of 7.1 percent. Thus, if you are planning to invest and get tax benefits and guaranteed returns, you may consider checking out this investment scheme. Here, we will find out how much you will earn in 20 years by investing Rs 4,000, Rs 8,000, and Rs 12,000 monthly in the post office Public Provident Fund. Let's find out.
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(Disclaimer: Our calculations are projections and not investment advice. Do your due diligence or consult an expert for financial planning)
Post Office Public Provident Fund
The Public Provident Fund (PPF) at the post office is a savings plan that helps you save money for the long term. The government backs it, offers tax benefits, and guarantees returns, helping to secure your financial future.
What are eligibility criteria to open PPF account?
Anyone can open a PPF account, including:
Employed people
Self-employed people
Pensioners
Eligibility criteria to open PPF account
A guardian can also open a PPF account for:
A minor
A person who can't manage their finances
Important: You can only have one PPF account in the whole country, which can be opened at a post office, or a bank.
Minimum deposit amount in Post Office PPF
The minimum deposit required in a year is Rs 500, while the maximum deposit allowed annually is Rs 1.50 lakh.
Combined Deposit Limit: The maximum limit of Rs 1.50 lakh applies to the combined deposits made in: Your own PPF account or a PPF account opened on behalf of a minor.
Where to open a PPF account?
You can open a PPF account at either a post office or a bank. Both options have the same rules and benefits, so you can choose the one that's most convenient for you.
PPF account maturity period
The account matures after 15 financial years, excluding the financial year of account opening.
What to do after PPF Maturity?
When your PPF account matures, you have a few options:
1. Take the maturity amount: Fill out the account closure form, submit it with your passbook, and get your money.
2. Keep the money in the account: You can leave the maturity amount in the account and still earn interest. You can withdraw the money anytime or make one withdrawal per year.
3. Extend the account: Within one year of maturity, you can extend your PPF account for another 5 years by submitting an extension form at the post office.
What are PPF withdrawal rules?
Here are the rules regarding withdrawals from a PPF account:
You can make one withdrawal per financial year, but only after five years from the date of account opening, excluding the year of account opening.
The amount of withdrawal allowed is up to 50 per cent of the balance credited to the account at the end of the fourth preceding year or the end of the preceding year, whichever is lower.
Post office PPF calculation conditions
Investment amount: Rs 4,000, Rs 8,000, Rs 12,000
Annualised rate of return: 7.1 per cent
Investment period: 20 years
What will be PPF corpus after 20 years with an investment of Rs 4,000 per month?
Annual investment: Rs 48,000 (4,000x12)
Your total investment amount throughout 20 years will be Rs 9,60,000. The estimated interest earned during this period will be Rs 11,70,652 and the estimated maturity amount will be Rs 21,30,652.
What will be PPF corpus after 20 years with an investment of Rs 8,000 per month?
Annual investment: Rs 96,000 (8,000x12)
Your total investment amount over 20 years will be Rs 19,20,000. The estimated interest earned during this period will be Rs 23,41,304 and the estimated maturity amount will be Rs 42,61,304.
What will be PPF corpus after 20 years with an investment of Rs 12,000 per month?
Annual investment: Rs 1,44,000 (12,000x12)
Your total investment amount over 20 years will be Rs 28,80,000. The estimated interest earned during this period will be Rs 35,11,957 and the estimated maturity amount will be Rs 63,91,957.