A recurring investment of as small as 2,000 to a decent amount of Rs 10,000 can create a good corpus even if the investor does not want to invest in equity schemes and want to have a fixed risk free earning on investment. If you invest a portion of your monthly income, let's say Rs 2,000, Rs 5,000 or Rs 10,000–as per your income- and want a safe investment, then Public Provident Fund (PPF) can be a good option.
The scheme is designed for all who seek risk-free wealth creation with a regular investment. It is a government-backed scheme that offers a good interest rate on investments, and the returns are tax-efficient.
Investing in PPF can be started with a small amount of Rs 500 per year to Rs 1.5 lakh per year. Let’s understand the math: if you invest a monthly deposit of Rs 2,000, Rs 5,000, or Rs 10,000 for 15 years–the maturity period.
PPF Calculation
The maturity period for the PPF scheme is 15 years, and the current interest rate is 7.1 per cent.
PPF Calculation - Rs 2,000 Monthly Investment
Particulars | Amount |
Monthly Deposit | Rs 2,000 |
Total Investment (15 Years) | Rs 3,60,000 |
Total Interest Earned (at 7.1% p.a.) | Rs 2,90,913 |
Maturity Amount | Rs 6,50,913 |
PPF Calculation - Rs 5,000 Monthly Investment
Particulars | Amount |
Monthly Deposit | Rs 5,000 |
Total Investment (15 Years) | Rs 9,00,000 |
Total Interest Earned (at 7.1% p.a.) | Rs 7,27,284 |
Maturity Amount | Rs 16,27,284 |
PPF Calculation - Rs 10,000 Monthly Investment
Particulars | Amount |
Monthly Deposit | Rs 10,000 |
Total Investment (15 Years) | Rs 18,00,000 |
Total Interest Earned (at 7.1% p.a.) | Rs 14,54,567 |
Maturity Amount | Rs 32,54,567 |
Also Read: Adani Group News: How Adani’s Latest Rs 3,050-Crore Acquisition Expands Its Smart Metering Footprint
PPF Interest Rate
PPF, or Public Provident Fund, currently earns 7.1% annual interest. Interest in this scheme is compounded annually. The rates are reviewed every quarter and can be increased or decreased based on the circumstances.