PPF Calculator: How ₹12,500 monthly investment can build tax-free corpus in 15 years

If you are looking for a long-term investment option that provides assured and attractive interest rates along with stable returns on your invested amount, and also wish to generate inflation-beating, compounded returns without taking market-related risks, then the Public Provident Fund (PPF) can be an ideal investment choice for you.

What is the PPF Scheme?

PPF is a long-term savings and investment scheme that comes with a lock-in period of 15 years. The government revises the interest rate every quarter. At present, the scheme offers an annual interest rate of 7.1 percent. Investors can also claim tax deductions of up to ₹1.5 lakh every financial year under Section 80C of the Income Tax Act.

Benefits of the Public Provident Fund

In today’s financial environment, investing has become essential for individuals who want to build long-term security. However, many people still remain confused about selecting the right investment option. If you are also looking for a reliable investment avenue that offers safety, tax benefits, and assured returns, the Public Provident Fund, commonly known as PPF, may be one of the best available choices. Over the years, this government-backed scheme has earned a strong reputation among conservative investors.

One of the biggest advantages of the PPF scheme is that it provides a combination of capital protection, guaranteed returns, and tax exemptions. The scheme falls under the “EEE” category, meaning Exempt-Exempt-Exempt. This means the invested amount, the interest generated, and the maturity proceeds are all exempt from taxation.

Know the Returns on Investing ₹1.5 Lakh Every Year

If a person invests ₹1.5 lakh annually, which works out to ₹12,500 every month, a significant corpus can be accumulated over 15 years through disciplined investing.

PPF Investment Calculation

Annual Investment: ₹1,50,000

Investment Duration: 15 Years

Interest Rate: 7.1% annually

Total Amount Invested: ₹22.5 Lakhs

Estimated Interest Income: ₹18.18 Lakhs

Estimated Maturity Value: ₹40.68 Lakhs

This indicates that after 15 years, the total interest earned may amount to more than 80% of the original investment. This happens because of the power of compounding, where investors earn returns not only on the principal amount but also on previously accumulated interest.

Who Should Invest in PPF?

PPF is considered highly suitable for investors looking for a secure and low-risk savings option. It is especially beneficial for salaried individuals, people planning retirement, and parents creating a financial cushion for their children’s education and future expenses.

Key Facts About Public Provident Fund Account

•Minimum deposit ₹ 500/- & Maximum deposit ₹ 1,50,000/- in a financial year.

•Loan facility is available from 3rd financial year upto 6th financial year.

•Withdrawal is permissible every year from 7th financial year.

•Account matures on completion of fifteen complete financial years from the end of the year in which the account was opened.

•After maturity, account can be extended for any number for a block of 5 years with further deposits.

•Account can be retained indefinitely without further deposit after maturity with the prevailing rate of interest.

•TId:11778761973546he amount in the PPF account is not subject to attachment under any order or decree of a court of law.

•Deposit qualifies for deduction under Sec.80-C of I-.TAct.

•Interest earned in the account is free from Income Tax under Section -10 of I-T.Act.