Home / Money / Personal Finance /  PPF calculator: How to accumulate 1 crore in public provident fund account
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PPF calculator: Public Provident Fund (PPF) is one of the government-backed small saving schemes that aim to provide assured return at the time of maturity. Under Section 80C of the income tax act, PPF account holder can claim income tax exemption on up to 1.50 lakh invested in this scheme in one financial year. Apart from this, it is 100 per cent risk-free and PPF interest rate, which is currently 7.10 per cent, is also 100 per cent tax exempted.

According to tax and investment experts, PPF account matures after 15 years of PPF account opening. But, a PPF account holder can extend its PPF account beyond 15 years in the block of 5 years and the PPF account extension facility can be exercised for infinite number of times. So, if invested properly in one's PPF account, one can become a crorepati at the time of PPF withdrawal.

On how to accumulate 1 crore in one's PPF account; SEBI registered tax and investment expert Jitendra Solanki said, "To accumulate 1 crore in one's PPF account, the account holder needs to exhaust one's 1.50 lakh limit in one financial year. In PPF account, one can invest for 25 to 30 years as one becomes an earning individual in between 25 to 30 years phase and it takes time for an earning individual to become vigilant about savings. So, 30 to 35 year is the phase when one becomes active about tax oriented-savings."

On how to continue investing in one's PPF account for such a long period; Manikaran Singhal, Founder at said, "PPF rules allow account holders to extend their PPF account beyond maturity. But, to extend one's PPF account, one will have to submit PPF account extension form in the last year of maturity at the bank or post office where one's PPF account exists."

Manikaran explained that PPF account can be extended in 5 years block and there is no bar on how many times one can extend one's PPF account maturity. So, for the first time, the investor will have to submit extension form in the 15th year of PPF account opening and then on every 5th year of PPF account extension.

Source: Groww SBI PPF calculator
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Source: Groww SBI PPF calculator

Assuming current PPF interest rate of 7.10 for 30 years, the PPF interest calculator suggests that one requires 1,08,000 annual investment in one's PPF account. As PPF allows 12 deposits in one year to an investor, a PPF account holder can invest this 1,08,000 in 12 monthly investments of 9,000 as well. So, like mutual fund SIP, a PPF account holder can accumulate 1 crore by simply investing 9,000 per month in one's PPF account for 30 years using extension facility in 15th, 20th and 25th year of PPF account opening.

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