Public Provident Fund (PPF) is a favorite long-term savings scheme for Indians. Recently, the government has not raised the interest rate for this scheme. Currently, the property is paying 7.10% interest.
So how to become a millionaire through PPF scheme?
First you need to remember one thing. You can’t earn big profit or income from Syrian investment. Only if your investment is high can you add the big amount of money you think.
But if an individual extends this PPF account after 5 years they are sure to become a millionaire. In simple words, one can accumulate more than Rs 1 crore in one’s PPF account by the time of retirement, said Karthik Jhaveri, Director, Finance, Transcend Consultants.
You have to extend the investment period of the PPF account twice again when it matures after 15 years. How is that?
For example, a PPF account holder invests Rs.1.50 lakh per year in the PPF account. That means monthly Rs. Suppose he invests in 8333.3 PPF. He has to invest the same amount for another 10 consecutive years after completion of 15 consecutive years.
In that case the total investment period is 25 years. At the end of 25 years the investor will get Rs 1,03,08,015 or Rs 1.03 crore as maturity amount. If his total investment amount (25 years) is Rs.37,50,000 and the interest rate is 7.10%, the interest received is Rs.65,58,015. Total Rs.37,50,000 + Rs.65,58,015 = Rs.10,308,015 i.e. Rs.1.03 crores.
If you invest Rs.8400 per month for 25 years from now, you will surely become a millionaire. Don’t forget that even more money is available, especially if interest rates rise.
As the PPF account falls under the EEE category one can get income tax benefits under section 80C up to Rs 1.5 lakh on one’s annual deposit. Apart from this, one’s PPF maturity amount is also tax exempt.
