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PPF Calculator: Invest Rs 1,000 a Month and Get Rs 18 Lakh Return. Know How it Works

Investments have always been a tricky endeavour. Most often the go-to choice for investors looking to make a safe investment with good returns was the Fixed Deposit (FD) accounts with banks. Investors can now look to their Public Provident Fund (PPF) as a means of safe investment with good returns on the same. With just Rs 34 per day put towards said investment can translate to Rs 1,000 per month in savings. With the central government-backed investment scheme, you can turn your thousands into lakhs with the right strategy. An added advantage here is that as a PFF investor you can also avail certain income tax benefits on interest that you earn. This also extends to the final maturity amount that you deposit in the PFF.

If you start investing now, you can avail an interest rate of 7.1 per cent on the PFF investment, according to the interest rates fixed by the finance ministry. The rate of interest will be same till September 30. Another thing to note is that there is a fixed maturity period of 15 years. After those 15 years are completed, the investor can then choose to withdraw the matured amount or keep the investment going. If they choose the latter, the funds can be grown for an additional five years.

The trick to double up is to do exactly that. Meaning that during those extended five years, you should consider investing and making deposits while the already matured amount keeps gaining interest in the PFF. This will compound the interest and give you better returns at the end of those five years.

Turning Rs 34 into Rs 18 lakh: Here is How

If you start investing Rs 34 every day or Rs 1,000 every month into your PFF scheme, you can potentially turn it into lakhs by the time you retire. If you start your investment of the above-mentioned amount right now, then in 15 years’ time you will have accumulated around Rs 3.25 lakh. However, this is assuming the interest rate does not change for that period and that you keep the investment rolling. It also does not account for any compounding of interest that you might see by depositing more than the mentioned amount. In any case, your fund will mature past the above-mentioned Rs 3 lakh mark.

Out of the Rs 3.25 lakh, around 1.80 lakh will be the investment that you made, and the rest, i.e., 1.45 lakh, will be the interest that your fund garnered over those 15 years. In the event that you opt to keep investing and letting the fund mature for an additional five years, then you can avail a fund maturity of Rs 5.32 lakh. Extending the policy term to keep the investment rolling for another five years will give you around Rs 8.24 lakh. If you keep the investment going for extended periods of five years every time, you will eventually get to your goal. If you by chance happen to extend the investment policy even for about 35 years from when you started, you will be able to save around 18 lakh just via the Public Provident Fund.

The trick here is to stay consistent in your investment pattern and to take full use of the policy provisions. All you need to do is put in just Rs 34 towards the fund on a daily basis.