PPF calculator: How to become a crorepati with a Public Provident Fund account

PPF calculator: The Public Provident Fund (PPF) is a popular long-term savings scheme in India. At present, it offers a 7.1% interest rate effective 1 April 2023. For the past few years, the government has not raised this restriction. Investors can open a PPF account in any bank or in a nearby post office. However, one needs to deposit a minimum of ₹500 per annum in one's PPF account. The most you can put into a PPF account is set at Rs. 1.5 lakh. It takes 15 years for the PPF account to mature.

How your PPF account can make you a crorepati

Making a crore would be difficult with a moderate investment. But Personal Finance experts say that PPF can do this trick with the power of compounding.

Individuals can extend their PPF account in a block of 5 years for an infinite number of times."When you are extending your PPF account, you should choose an extension with an investment option as it would enable you to get interest on both the PPF maturity amount and fresh investments. In simple words, one can accumulate more than a crore in one's PPF account at the time of retirement," said Kartik Jhaveri, Director of wealth at Transcend Consultants.

PPF calculator

If an earning individual extends his PPF account twice after the completion of 15 years, he/she will be able to amass huge wealth and become a crorepati in 25 years. Let's see how. The PPF account holder is investing ₹1.50 lakh per year in one's PPF account, he can also split the payment monthly in instalments of RS 8333.3, then after 25 years of investment, one's PPF maturity amount would be ₹1,03,08,015 or around ₹1.03 crore, assuming PPF interest rate for the entire period at flat 7.10 per cent per annum as per the PPF calculator (screenshot below) The invested value is ₹37,50,000, and the interest earned is ₹65,58,015.

PPF taxation rules

PPF account falls under the EEE category where one can claim income tax benefits under Section 80C on one's annual deposit of up to ₹1.5 lakh. apart from this, one's PPF maturity amount is also tax-exempt.