PPF Scheme: Invest Rs 1,000 per month and get over Rs 18 lakh – Here’s how

PPF is a scheme guaranteeing return on investment. In 1968, the National Savings Organization was directed to make a profitable investment option out of small savings. If investments in PPF are done properly, investors can expect very good returns in the long term.

Currently offering an interest rate of 7.1 per cent, the Public Provident Fund offers the option of depositing between a minimum Rs 500 and a maximum Rs 1.5 lakh every year. The maturity period of a PPF account is 15 years. A person has the option of withdrawing the money once the account matures, or extending the account in 5-year blocks.

A Rs 1,000 investment every month for a period of 15 years will take their deposited amount in 15 years to Rs 1.80 lakh. With an interest rate of 7.1%, you will earn an interest of Rs 1.45 lakh, taking the total amount in the PPF account to Rs 3.25 lakh. Extending for a period of 5 years while continuing to deposit Rs 1,000 monthly, this amount will grow from 3.25 lakh to Rs 5.32 lakh. A second 5-year extension will take the amount to Rs 8.24 lakh.

A third 5-year extension takes this amount from Rs 8.24 lakh to Rs 12.36 lakh as the total period of investment reaches 30 years. A fourth extension on the initial 15-year period will take the total amount to Rs 18.15 lakh after an investment period of 35 years.  

Staring with Rs 1,000 investments in PPF early in your career will ensure a handsome amount coming back at a time when you would start planning your retirement.

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(Disclaimer: This is in no way intended to be any financial advice. For further questions, please check with your investment consultant or portfolio manager)