How to earn 1 crore INR by investing in a PPF account?

A public provident fund (PPF) is a scheme for building corpus for life after retirement by depositing a sum of money over a long period of time. As per the rules, an investor can open this PPF account in any bank or nearby post office by making deposit 100. It is necessary to deposit the minimum 500 in the account each year. A PPF account falls under the exempt-exempt-exempt category, which allows taxpayers to claim income tax benefit under Section 80C on the annual deposit of 1.5 lakh. According to norms, there is a 15-year lock-in period that a depositor can deposit 1.5 lakh in a single deposit or in maximum 12 installments. An interest rate of 7.1 per cent is paid. on a quarterly basis in a PPF account. If a person invests money every year with discipline, he/she can end up saving 1 crore at the time of maturity.

A man counts Indian currency notes inside a shop in Mumbai. The Indian rupee had closed at 71.03 against the US dollar on Thursday. (REUTERS)

Although the PPF account has a tenure of 15 years, but one can extend the five-year account for an infinite number of times, Jitendra Solanki, SEBI-registered tax and investment expert, told Hindustan Times’ sister website Livemint. This means that an investor can continue the PPF option without withdrawing the money. While the PPF account is extended for the next five years, the depositor also has the option of opting for extension with investment or without one.

However, some experts suggest opting for the investment option extension for the PPF account. According to Kartik Jhaveri, director (wealth) at Transcend Consultants, opting for extension with investment helps earn interest on both the PPF principal amount and the fresh investment.

If an earner opens PPF account at the age of 30 and after the mandatory 15-year lock-in period extends the investment on three occasions (15 years), he/she would have invested for a total period of 30 years. Let’s say that the amount invested per year is 1.5 lakh in a PPF account. After 30 years, the due amount will end up being 1.54 crore on the condition that the interest rate remains at 7.10 per cent. per year.


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