PPF Calculator: How much money will you get by investing ₹1.5 lakh in PPF annually? Understand the full calculation...
PPF Calculator: If you wish to invest ₹1.5 lakh annually in a place where your money remains safe and grows steadily, PPF is an excellent option. Unlike the stock market, it is not subject to volatility and comes with a government guarantee. Additionally, leaving your money invested for the long term allows you to benefit from the power of compounding. Currently, the annual interest rate on PPF is 7.1%, though the government may adjust this rate periodically.
If you deposit the full ₹1.5 lakh into your PPF account every year, how much money will you have after 15 years? And if this investment continues for 20 or 25 years, what will the final corpus look like? Let’s break down the calculations.
**Approximately ₹41 lakh in 15 years**
The standard tenure for a PPF account is 15 years. If you deposit ₹1.5 lakh annually during this period, your total out-of-pocket investment will be ₹22.50 lakh.
Interest accumulates on this amount over time. Assuming an interest rate of 7.1%, the total corpus after 15 years would be approximately ₹40.68 lakh. In other words, you invested ₹22.50 lakh, and interest added another ₹18.18 lakh. This highlights the true power of PPF.
**Approximately ₹67 lakh in 20 years**
You can continue your PPF account even after the initial 15-year term ends; it can be extended in blocks of 5 years. Suppose you continue investing ₹1.5 lakh annually for 20 years; your total investment would amount to ₹30 lakh.
Assuming the interest rate remains constant at 7.1% throughout this period, the corpus after 20 years could reach approximately ₹66.58 lakh. While your total investment is ₹30 lakh, interest earnings could add another ₹36.58 lakh.
**Over ₹1 crore in 25 years**
The most interesting calculation is for a 25-year period. By investing ₹1.5 lakh annually, you would deposit a total of ₹37.50 lakh over 25 years. However, if the 7.1% interest rate remains constant throughout the tenure, the total corpus could reach approximately ₹1.03 crore.
In other words, you invested ₹37.50 lakh, and interest earnings added about ₹65.58 lakh to it, pushing the total amount beyond ₹1 crore. This is why, for long-term investments, it is not enough to look only at the amount you have deposited; one must also consider the time allowed for that money to grow.
**Breakdown for 15, 20, and 25 Years**
| Tenure | Annual Deposit | Total Deposit | Estimated Interest | Total Amount |
| :--- | :--- | :--- | :--- | :--- |
| 15 Years | ₹1.50 lakh | ₹22.50 lakh | ₹18.18 lakh | ₹40.68 lakh |
| 20 Years | ₹1.50 lakh | ₹30 lakh | ₹36.58 lakh | ₹66.58 lakh |
| 25 Years | ₹1.50 lakh | ₹37.50 lakh | ₹65.58 lakh | ₹1.03 crore |
**Note:** These figures are calculated assuming a constant interest rate of 7.1% over the entire 15, 20, or 25-year period. In reality, the PPF interest rate is subject to change; therefore, the final maturity amount may differ.
**When is the best time to deposit money?**
PPF interest is calculated based on the lowest balance in the account between the 5th and the last day of the month. Therefore, if you plan to deposit the full annual limit of ₹1.5 lakh at once, doing so before the 5th of the month can be advantageous.
If depositing the entire amount at once each year is difficult, you can make deposits in installments throughout the year. However, you must keep the annual limit of ₹1.5 lakh in mind.
**What points should be kept in mind regarding PPF investments?**
PPF allows for partial withdrawals subject to certain conditions; however, it cannot be used like a regular savings account.
The interest rate does not remain constant. The government determines the PPF interest rate, and it may rise or fall in the future. Continue investing every year. It is mandatory to deposit at least ₹500 each financial year to keep the account active.
Make sure to add a nominee. This simplifies the claim process for the funds in the event of the account holder's death.
PPF is a safe investment, but it alone is not sufficient for every financial goal. Consider other investment options as well, based on your needs and risk profile.
Disclaimer: This content has been sourced and edited from Money Control. 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.
