PPF calculator: Public Provident Fund (PPF) is a long term investment tool that enables an investor to meet its financial requirements post-retirement as well. As per the the PPF rules, an investors can open a PPF account in any bank or in a near-by post office by depositing ₹100 in one’s PPF account. However, one needs to deposit a minimum of ₹500 per annum in one’s PPF account. PPF account will have a 15-year lock-in period in which an earning individual can deposit up to ₹1.5 lakh in one financial year in single deposit or in maximum 12 instalments.
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According to tax and investment experts, PPF account falls under EEE category where one can claim income tax benefit 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 exempted. PPF interest rate of 7.1 per cent is payable on quarterly basis and if a person maintains investment discipline, one can retire as a crorepati at the time of PPF account maturity.
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Speaking on how an investor can maximise one’s return from PPF account, SEBI registered tax and investment expert Jitendra Solanki said, “PPF account has maturity period of 15 years. But, one can extend extend one’s PPF account in block of 5 years for infinite number of times. This enables an investor to continue with this risk-free investment option without withdrawal of PPF maturity amount. While extending one’s PPF account for next 5 years, one has option to choose extension with investment or extension without investment.”
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Advising PPF accountholder to extend one’s account with investment option, Kartik Jhaveri, Director — Wealth at Transcend Consultants said, “When you are extending your PPF account, you should choose extension with investment option as it would enable you to get interest on both PPF maturity amount and fresh investments. If a person do this, he or she can expect to retire as a crorepati. In simple words, one can accumulate more than a crore in one’s PPF account at the time of retirement.”
PPF calculator
If an earning individual opens PPF account at 30 years of age and extends one’s PPF account on three occasions, then in that case, the PPF account holder will be able to invest in PPF account for 30 years. Suppose the investor invests ₹1.50 lakh per year in one’s PPF account, then after 30 years of investment, one’s PPF maturity amount would be ₹1,54,50,911 or around ₹1.54 crore, assuming PPF interest rate for the entire period at flat 7.10 per cent per annum.
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As per the PPF calculator, in these 30 years, the investor investment is mere ₹45 lakh ( ₹1.5 lakh x 30), whereas PPF interest earned is ₹1,09,50,911.
