Featured Article: How to Make 1 Crore in 20 years from PPF Account. It’s been quite some time that I had written on the blog, had been busy enjoying my father-hood with my new born daughter, will have to also plan to invest in her ppf account for minor. Of-course will plan to invest for her future savings as well. So many users were constantly asking questions on the blog, and I have been answering them as and when I could. Now that I find some time to write for the blog, will focus on writing more targeting the PPF Account.
In this article, I will showcase How to make 1 crore in 20 years from PPF Account. Although it sounds different, but its true a PPF Account holder can make around 1 crore by the end of 20 years with the present interest rate of 8.7% ( I mean with interest rate varying from 8.5% – 8.7%) a user can easily make 1 Crore in 20 years from a PPF Account. Although some may not agree with the concept and may ask users to deposit in Mutual Fund, where in the return of investment will be much higher. I have made this calculation based on the Safe investment plan using PPF Account. Now let’s see the math on How to Make 1 Crore in 20 years from PPF Account.
How to Make 1 Crore in 20 Years from PPF Account
Well, if are in early part of your working life with 25+ age, you can plan to follow this math with better savings for tax and also see 1 crore by the time you reach retirement. Further, if you are in your 45 year age group, you can still make 1 crore by the time you retire from your job (let’s say at age 60 ) with a systematic investment in PPF Account.
Yes, the math is right, with an annual investment of 1,50,000 INR to your PPF Account for a span of 20 years the total accumulated corps would be 30,00,000 INR ( 30 Lakh ) well, what’s the return on investment ? that’s interesting to know its – 70,00,000 INR appx with a current interest rate of 8.7% at the end of 23rd year, so that makes to 1 crore by the end of 23rd year. You can see the calculation chart below.
Risk involved in PPF Investment ?
There is no risk whatsoever when you invest in PPF Account every year, as this a government linked small savings investment scheme and hence a user can deposit in PPF Account without any risk of losing the money. With an mere investment of 30 Lakh the accumulated corps will yield 1 crore after 23 years. Although there are better savings plan such as mutual funds which will yield better returns than PPF, but the amount of safety involved in PPF investment is 100% or rather risk factor involved is 0%. A user can actually plan to invest part of savings made from PPF into Mutual funds during later part of his/her life for even better returns. That way there is no risk involved in PPF Account.
How to Invest in PPF to get 1 Crore
The math is simple, keep a SIP for 20 years with 1,50,000 INR which will provide you a tax benefit for full invested amount under Sec 80 C and you can reap better returns by the end of 23 rd year.
If you see the above chart, its clear that with a investment of 30,00,000 INR your corps grows to 1,03,59,692.78 INR with a current interest rate of 8.7% and the math remains closer to 1 crore with an interest rate upto 8.5%. Incase the interest rate falls down, a user needs to wait for an additional year or two. The above chart is made for a fresh investment made from April 1st 2016 in PPF Account and continued till 2035 which is 20 years. For the rest of the three years without investment the amount continues to grow @ 7 Lac , 7.6 Lac & 8.29 Lac as interest for each year.
Also Read : Best Time to Invest in PPF for Better Returns