PPF calculator: How much you need to deposit per month to become a crorepati
PPF calculator: Public Provident Fund (PPF) is one of the high yielding income tax saver option, which is 100 per cent risk-free. Currently, PPF interest rate is 7.1 per cent but it’s announced on quarterly basis by the Government of India (GoI). So, the PPF interest rate may change in future but for those who have low risk appetite, PPF is one of the most favoured assured guarantee return investment tool. According to tax and investment experts, if invested in a smart manner, one can become a crorepati by choosing monthly investment mode and availing the PPF account extension facility after the maturity period of 15 years.
PPF account deposit rules
Speaking on the PPF investment in monthly SIP format Amit Gupta, MD at SAG Infotech said, “As per the PPF account rules, one can do a maximum of 12 deposits in one’s PPF account. So, if an investor, who has low risk appetite and don’t have a huge lump sum amount for investment, he or she can choose the monthly investment mode like mutual funds monthly SIP style. But, the investor is advised to invest in one’s PPF account by 5th of every month so that the PPF account holder can get PPF interest of that month as well.”
PPF account extension rule
Advising investors with low risk appetite to take advantage of PPF account extension rule; Kartik Jhaveri, Director — Wealth Management at Transcend Consultants said, “PPF account has maturity period of 15 years, but one can extend one’s PPF account by submitting PPF extension form in the 15th years of account opening, choosing interest with investment option. One can extend one’s PPF account for infinite number of times but in teh block of 5 years. So, if someone wants to go long in PPF, they need to keep extending their PPF account in the maturity year.”
Assuming an investor invests ₹9,000 per month by 5th of every month, the investor would be able to invest ₹1,08,000 per annum in one’s PPF account. Keeping average PPF interest rate at current 7.1 per cent, one can go on investing in one’s PPF account for around 30 years. If a PPF account holder invests ₹9,000 per month for 30 years assuming 7.1 per cent average annual PPF return, the PPF calculator says that one’s PPF maturity amount will be ₹1,11,24,656.
Out of this ₹1,11,24,656 or ₹1.11 crore PPF maturity amount, the net investment done by the investor throughout the investment period will be ₹32,40,000 or ₹32.40 lakh while the net PPF return earned by the PPF account holder in this period will be ₹78,84,656.
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