Why is PPF the best? How much should you invest every month to achieve your desired financial goal? This calculation will give you the answer..
If you wish to build a substantial fund over the long term without taking any risks, the PPF (Public Provident Fund) remains one of the most reliable schemes available today. The unique feature here is that even small, consistent investments can accumulate into a significant corpus over time.
With an annual interest rate of 7.1% and tax-free returns, the PPF is perfect for those who prefer to build wealth gradually.
The only question remains: how much should one invest every month to build a sizable fund?
We explain this to you with clear, precise calculations.
You can start investing with as little as ₹500.
A fund ranging from ₹1.6 lakh to ₹9.6 lakh in 15 years.
Your money nearly doubles in 20 years.
Interest Rate: 7.1% (reviewed by the government every 3 months).
EEE Tax Benefit (Completely tax-free).
The Big Question: Why is the PPF so popular?
Because it offers three key benefits simultaneously:
✔ Guaranteed Returns
✔ Tax-Free Earnings
✔ Long-Term Wealth Creation
And most importantly, the risk involved is virtually zero.
How much should you invest every month? (See the calculations)
Let's look at the numbers directly:
PPF Monthly Investment Calculator (Estimated)
Monthly Investment | After 15 Years | After 20 Years
₹500 | ₹1.6 Lakhs | ₹2.65 Lakhs
₹1,000 | ₹3.21 Lakhs | ₹5.30 Lakhs
₹2,000 | ₹6.43 Lakhs | ₹10.60 Lakhs
₹3,000 | ₹9.64 Lakhs | ₹15.91 Lakhs
These calculations are based on an interest rate of 7.1% (estimated).
Can you build a substantial fund even with just ₹1,000 or ₹2,000?
Absolutely, you can.
₹1,000 per month = ₹5 Lakhs+ in 20 years
₹2,000 per month = ₹10 Lakhs+
And if you continue extending this period (to 25–30 years), this amount can multiply manifold. Basic Information about PPF
Interest Rate: 7.1% (Determined by the Government)
Lock-in Period: 15 Years
Minimum Investment: ₹500 per annum
Maximum Investment: ₹1.5 Lakhs per annum
Taxation: Completely Tax-Free (EEE)
What happens after 15 years?
This is where the real game begins:
You can extend it for another 5 years.
Then for another 5 years...
Meaning: Your money can continue to grow for 15 → 20 → 25 years.
And that is the secret to long-term growth.
Can you withdraw money in between?
Yes, but subject to certain rules:
No withdrawals are permitted for the first 6 years.
Thereafter, partial withdrawals are allowed.
Full Withdrawal:
Only after the completion of 15 years.
Can you also avail of a loan against your PPF?
Yes, this is another major benefit.
From the 2nd year up to the 5th year:
You can avail of a loan of up to 25% of your deposited amount.
And that too, at a low interest rate.
What are the tax benefits?
PPF falls under the EEE Category:
Tax exemption on the investment amount.
No tax on the interest earned.
No tax on the maturity proceeds.
In other words, The entire earnings go straight into your pocket.
Disclaimer: This content has been sourced and edited from Zee Business. 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.
