NEW DELHI : Want to build a sizeable corpus through a government-backed savings scheme? Investing Rs 10,000 every month in the public provident fund (PPF) can help you build a corpus over the long term. At the current PPF interest rate of 7.1% per annum, let’s calculate how much your investment could grow to in 15 years.
If you put Rs 10,000 every month into your PPF account, your annual investment will be Rs 10,000 × 12 = Rs 1,20,000. Over 15 years, your total contribution will be Rs 1,20,000 × 15 = Rs 18,00,000. This is below the PPF’s maximum annual investment limit of Rs 1.5 lakh.
The current PPF interest rate is 7.1% per annum. The government reviews small-savings interest rates periodically. Therefore, the actual maturity amount over a 15-year period can differ if the PPF interest rate changes in future.
Assuming a monthly investment of Rs 10,000 for a period of 15 years at an annual PPF interest rate of 7.1%, the estimated interest earned works out to around Rs 13.56 lakh. So, Rs 10,000 invested every month for 15 years could potentially grow to around Rs 31.56 lakh, assuming the 7.1% interest rate remains unchanged throughout the entire period.
PPF has a standard tenure of 15 years. After completing the initial 15-year period, the account can be extended in blocks of five years, subject to the applicable rules. This makes PPF a long-term savings instrument rather than a short-term investment option.
The Rs 31.56 lakh figure is an illustration, not a guaranteed future maturity amount. PPF interest rates are set by the government and can change from time to time. The calculation assumes that the current 7.1% rate remains unchanged for the full 15 years. Also, the calculation assumes that the ₹10,000 monthly contribution is made at the beginning of each month. PPF interest is calculated based on the lowest balance between the fifth day of the month and the end of the month.
Investing Rs 10,000 every month means putting away Rs 18 lakh over 15 years. At an assumed PPF rate of 7.1%, the estimated corpus comes to around Rs 31.56 lakh. That means the estimated interest component is around Rs 13.56 lakh on total contributions of Rs 18 lakh. The actual maturity value will depend on the PPF interest rates applicable during the investment period.
