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Home >Money >Personal Finance >PPF calculator: How to grow your account balance to 1 crore

Public Provident Fund or PPF is a government-backed small saving scheme, which is 100 per cent risk-free. According to experts, this is one of the limited voluntary investment tool that helps an investor beat the inflation in long-term time-horizon.

They are of the opinion that if invested property, one can become a crorepati at the time of redemption. What they need is to extend one's PPF account after 15 years maturity period. Apart from this, one will be getting income tax exemption on the investment, PPF interest earned and the PPF withdrawal amount.

Speaking on the income tax benefit available in one's PPF account, Mumbai-based tax and investment expert Balwant Jain said, "PPF account falls under EEE category where one's investment up to 1.5 lakh per annum is income tax exempted. Apart from this, PPF interest rate and PPF maturity amount is also exempted from any kind of income tax outgo." Jain said that one can start investing in PPF account at the age of 30 year and can continue saving in PPF acccount for the next 30 years, when they retire. What they need is to submit an application in the prescribed format for extension of their PPF account.

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Speaking on the PPF account extension; Manikaran Singhal, Founder, goodmoneying.com said, "One can extend one's PPF account for five years by submitting application in the prescribed format at the bank or post office where one's PPF account exists." On how many times one can extend one's PPF account Singhal said, "One can extend one's PPF account on infinte number of times but every time they extend their PPF account, it will be extended for 5 years only."

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Assuming that an investor opens PPF account at the age of 30 years investing 9,000 per month ( 1,08,000 per annum) and the PPF account holder extends one's PPF on three occasssions — 15th, 20th and 25th year of PPF account opening. Then the PPF account holder will be able to continue saving in PPF account for 30 years.

Assuming current PPF interest rate of 7.1 per cent for the entire period of investment, the PPF calculator SBI (State Bank of India) suggests that one will get 1,07,86,639.32.

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Out of this 1,07,86,639.32 PPF maturity amount, one will get 75,46,639.32 PPF interest while one will be investing 32,40,000 in this period of 30 years.

Interestingly, the wealth gained as PPF interest and the PPF maturity amount will be income tax exempted. So, this PPF trick of account extension will not only help the investor continue enjoy Section 80C benefit but at the same time it will help him grow an assured 1.11 crore retirement fund.

However, if a person invests 9,000 per month ( 1,08,000 per annum) for 15 years, one's PPF maturity amount as per the PPF calculator SBI (State Bank of India) will be 28,40,111.34 only.

Out of this 28,40,111.34, one's PPF interest earned will be 12,20,111.34 while the net investment will be 16,20,000.

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