PPF Maturity Calculator: You will get ₹2.26 Cr as soon as you turn 60! ₹1.74 Lk will come from interest alone, that too without paying a single rupee tax
Do you want to become a crorepati without risk and without paying tax? Know how investing ₹12,500 every month in PPF can give you ₹2.26 crores on retirement. See the complete calculation, rules, and comparison with ELSS in this guide.
Do you want to become a crorepati? As soon as you hear this question, the fluctuations of the stock market, the risk of mutual funds, and the hassle of property start revolving in your mind. But what if I tell you that there is a 'magical' government treasury, where you can become a crorepati without any risk, even while sleeping peacefully? And the biggest thing - the government will not take even ₹1 tax on your earnings!
Yes, this is not a dream, but a reality. And the name of this government treasury is PPF (Public Provident Fund). It is not just an investment scheme, but an 'Akshay Patra', in which whatever you put in, you get it back manifold by the power of compounding.
Today we will show you step-by-step how investing just ₹ 12,500 in PPF every month can make you the owner of ₹ 2.26 crores at the age of 60.
What is PPF and when did it start?
Public Provident Fund (PPF) was started by the Government of India in 1968. Its main objective was to give common people a small savings scheme in which they can create a big fund for their long-term goals, such as children's education, marriage or retirement, by adding a little money. Its biggest feature is its security and tax benefits, because it is guaranteed by the government.
Why is PPF considered the 'Brahmastra of investment'?
The biggest reason behind the popularity of PPF is its EEE (Exempt-Exempt-Exempt) status. In the world of finance, it is considered as 'Brahmastra'.
First E (Exempt): You get full exemption under Section 80C of Income Tax on the investment of up to ₹ 1.5 lakh every year.
Second E (Exempt): The interest (currently 7.1%) you get every year on your investment is also completely tax-free.
Third E (Exempt): After 15 years or whenever you withdraw the entire amount on maturity, there is no tax on that amount.
Meaning, earn, save and pay no tax on it.
Complete calculation of becoming a crorepati: How will your money grow?
Let us now understand the mathematics that turns your small investment into crores. Suppose, you are 25 years old and you start investing ₹12,500 every month (i.e. ₹1.5 lakh annually) in PPF.
(Based on current interest rate of 7.1%)
| Investment Period | Age | Total Investment | Total Interest | Maturity Amount |
|---|---|---|---|---|
| 15 years (First Maturity) | 40 years | ₹22.50 lakh | ₹18.18 lakh | ₹40.68 lakh |
| 20 years (First Extension) | 45 years | ₹30.00 lakh | ₹36.58 lakh | ₹66.58 lakh |
| 25 years (Second Extension) | 50 years | ₹37.50 lakh | ₹65.58 lakh | ₹1.03 crore |
| 30 years (Third Extension) | 55 years | ₹45.00 lakh | ₹1.09 crore | ₹1.54 crore |
| 35 years (Fourth Extension) | 60 years | ₹52.50 lakh | ₹1.74 crore | ₹2.26 crore |
You see, at the age of 60, you will have ₹2.26 crore in your account, of which your invested money is only ₹52.50 lakh, while ₹1.74 crore is just the interest earned! This is the real power of compounding.
How to increase PPF account? 'Extension' rule
You must be thinking that PPF matures in 15 years, so how will it last for 35 years?
The answer to this is the 'extension' feature of PPF. After the completion of 15 years, you can extend your PPF account any number of times in blocks of 5 years each. If you want, you can continue it without depositing money (on which interest will continue to accrue) or you can grow it faster by continuing to invest every year.
PPF vs ELSS: Safety or higher returns?
People often ask whether to invest in PPF or ELSS (Equity Linked Savings Scheme) mutual funds?
| Feature | PPF (Public Provident Fund) | ELSS (Equity Linked Saving Scheme) |
|---|---|---|
| Risk | Zero risk, backed by government guarantee | Market risk, returns not guaranteed |
| Returns | Fixed returns (currently 7.1%) | Estimated 12–15% (market-dependent) |
| Tax Benefits | Completely tax-free (EEE status) | 80C deduction on investment, 10% tax on capital gains |
| Lock-in Period | 15 years | 3 years |
| Best For | Those seeking safe and guaranteed returns | Those willing to take risks for potentially higher returns |
Conclusion: Powerful, safe and tax free
PPF (Public Provident Fund) is a very powerful, safe and tax-free investment option for the long term in India. Its power of compounding and EEE tax status make it attractive. A disciplined investor can create a tax-free fund of more than ₹2.26 crore in 35 years without any risk by investing just ₹12,500 every month. This is an ideal plan for those who want to create a large and safe corpus for their retirement.
Frequently Asked Questions (FAQs)
Q1: Who can invest in PPF?
A:
Any Indian citizen, including children, can open a PPF account.
Q2: What is the minimum and maximum amount that can be invested in PPF?
A:
You can invest a minimum of ₹500 and a maximum of ₹1.5 lakh in a financial year.
Q3: What is the maturity period of PPF?
A:
Its maturity period is 15 years, which can be extended any number of times for 5-5 years.
Q4: What is the current interest rate on PPF?
A:
Currently, PPF is offering interest at the rate of 7.1% per annum (it may change every quarter).
Q5: Is the entire amount received from PPF tax-free?
A:
Yes, PPF is completely tax-free (EEE) at all three levels – investment, interest and maturity.
