PPF Calculator: How to become a crorepati with Public Provident Fund? Explained – Times of India

PPF calculator to become a crorepati: Social Security Fund (PPF) is a widely preferred investment choice that provides guaranteed returns backed by the government. PPF is considered one of the safest investment options, making it suitable for retirement planning and achieving long-term financial goals like weddings, your child’s education, etc.

PPF Interest Rate:

The interest rate for the social insurance fund is set by the Ministry of Finance on a quarterly basis, so it can change every three months. Currently, the PPF interest rate is 7.1% for the October to December 2024 quarter.
Interest is calculated based on the lowest balance in your PPF account between the end of the 5th day and the end of the month. Interest earned is credited to your account at the end of each financial year.

Maturity of PPF Account

A PPF account matures 15 years after its opening, excluding the year in which it is opened. At maturity, account holders have three options: close the account and withdraw all funds by submitting a closure form and bank passbook; keep the account open without additional deposits, continue to earn interest and make withdrawals once a financial year or at any time; or extend the account for an additional five years, with the option to renew every five years by submitting an extension form within one year of expiry.
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How much will I get after 15 years in PPF?

Investing in (PPF can bring substantial returns in the long run. If you invest the maximum permissible amount of Rs. 1.5 lakh in a single installment at a prevailing interest rate of 7.1%, you will get a total amount of Rs. 40,68,209/- after 15 years This amount includes your investment of Rs 22,50,000 over 15 years and the accrued interest of Rs 18,18,209.

How can I earn more than Rs 1 crore from PPF?

After 15 years, you have the option to extend your PPF account for a block of 5 years. If you avail this option twice, meaning you invest in PPF for 25 years, then your corpus at the end of the period will be Rs 1,03,08,014.97/- which is over Rs 1 crore.
If you decide to extend your PPF account further for another period of 5 years making the total investment period 30 years, the accumulated corpus will be Rs.1,54,50,910.59/- which is over Rs.1.5 Crores. This includes the cumulative investment of Rs 45 lakh from your end and interest payment of Rs 1,09,50,911/-

PPF Account Balance

To open a PPF account, you need to deposit a minimum of Rs 500 per financial year with a maximum limit of Rs 1.5 lakh. This maximum limit applies to your personal account and any accounts you maintain for minors.
You have the flexibility to deposit in multiple installments, each installment being at least Rs 50 as long as the total does not exceed Rs 1.5 lakh for the year.

PPF tax benefits

One of the key benefits of investing in PPF is the tax benefits it offers. Deposits made in a PPF account qualify for deductions under Section 80C of the Income Tax Act. Plus, the interest earned and the maturity amount are tax-free!
This means that PPF is an EEE (Exempt, Exempt, Exempt) investment product providing tax exemption at all stages of the investment process.
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Withdrawal from PPF account

After a minimum of five years have passed since the end of the financial year in which you opened your PPF account, you can make one withdrawal per financial year. The maximum withdrawal amount is 50% of the balance at the end of either the fourth preceding financial year or the last financial year, whichever is lower.

PPF FAQ

Can I invest 2 lakhs in PPF?
No. The maximum investment limit in PPF per year is Rs 1.5 lakh.
Can I deposit 1.5 lakh in PPF every year?
Yes, you can invest a maximum of Rs 1.5 lakh in your PPF account in a year.
Can I withdraw PPF after 5 years?
Yes, you can make partial withdrawals from your PPF account after 5 years of investment in it. However, withdrawals are subject to rules as stated in the article above.