Extra Income: Want to earn extra income alongside your job? PPF can help you with this...

If you want to have a source of extra income besides your job by the time you reach 40, then PPF can make that happen for you. Yes, you heard that right. The Public Provident Fund (PPF) is considered quite good for long-term investment and tax benefits, but this scheme can also help you earn money. With its help, you can earn lakhs of rupees every year from the comfort of your home. But for this, you will have to adopt a special strategy. Here's how it works.

How will this magic happen?
To earn interest from PPF without making contributions, you first need to invest in it continuously for 15 years, starting at the age of 25. PPF matures in 15 years. After 15 years, you will be 40 years old. Then, after its maturity, you will get the opportunity to earn money for free. This earning will come from interest.

How will the earnings happen?
After investing continuously for 15 years, your scheme will mature, but you should not withdraw this amount. If you don't withdraw the money, the amount deposited in your PPF account will continue to earn interest according to the PPF calculation. This is called PPF Extension Without Contribution. No application is required for extension without contribution; if you don't withdraw the money after maturity, it automatically applies. From such an account, you can withdraw the entire amount at any time or let it remain deposited and earn interest on the deposit.

Understand how much money will be generated from PPF in 15 years
A maximum of Rs 1.5 lakh can be invested annually in PPF. You will have to deposit this much money annually in this scheme for 15 years. In this way, a total investment of Rs 22,50,000 will be made in 15 years. Based on the current interest rate of 7.1%, you will earn an interest of ₹18,18,209, and the maturity amount will be ₹40,68,209.

How much interest will you earn every year?
When you leave the maturity amount of ₹40,68,209 in the account, you will earn annual interest at the current interest rate. Based on the current interest rate of 7.1%, this interest will be ₹2,88,842. This way, you can earn lakhs of rupees in interest every year without any further contributions. If calculated every month, this amounts to ₹2,88,842/12 = ₹24,070 per month. Interest will continue to accrue as long as the money remains deposited.

Option for extension with contributions
PPF also offers the option of extending the account with contributions. However, for this, you need to apply for an account extension before the completion of one year from the maturity date. Extending with contributions extends the account directly for 5 years. You can extend your PPF account multiple times in blocks of 5 years.

Please note:
The PPF interest rate has been 7.1% for a long time, so the calculations here are based on this interest rate. However, the government reviews interest rates every three months, so this interest rate may change in the future. If the interest rate changes, the calculation of returns will also change.

Disclaimer: This content has been sourced and edited from Dainik Jagran. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.