Many people think becoming a millionaire is just a dream, but today, it’s not very difficult to turn this dream into reality. There are many options available where you can accumulate a good amount by investing for the long term. If you are an investor who prefers to invest without risk, you can also achieve your dream of becoming a millionaire through the Public Provident Fund (PPF). All you need to do is apply the 15+5+5 formula while investing in this scheme.
Current PPF Interest and Maturity Period
The Public Provident Fund (PPF) currently offers an interest rate of 7.1%. Usually, the scheme matures in 15 years. However, to become a millionaire, you’ll need to invest for 25 years by following the 15+5+5 formula.
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Understanding the 15+5+5 Investment Formula
In the 15+5+5 formula, “15” refers to the initial 15-year maturity period, while “5+5” means two 5-year extensions. As per the PPF rules, when the scheme is extended, it is done in 5-year intervals. Therefore, to invest for 25 years, you need to apply for two extensions after the initial 15 years.
How to Become a Millionaire with PPF
The maximum amount you can invest in PPF per year is ₹1.5 lakh. If you consistently invest ₹1.5 lakh annually for 25 years, you can achieve your goal of becoming a millionaire in 25 years.
Creating 1st Crore is the most Difficult
15℅ Rule – 15*15*15
Rs 15,000 invested for 15 Yrs at 15℅ would create 1 crore corpusAlso, if u cant save 15,000 & cant make 15℅ return
Rs 12,500 with a step up SIP of 12℅ @ 10℅ CAGR for 15 yrs can also make 1 CrIm just halfway. pic.twitter.com/JrvbpAwAMd
— Bull Markets (@BullMarkets1) August 13, 2024
Investment Breakdown: How the Formula Works
According to the PPF calculator, by investing ₹1.5 lakh every year for 25 years, you will contribute ₹37,50,000 in total. At an interest rate of 7.1%, you will earn ₹65,58,015 in interest. In total, after 25 years, you will receive ₹1,03,08,015, which includes both your principal investment and the interest.
How to Extend Your PPF Account
To extend your PPF account, you must submit an application to the bank or post office where your account is held. The application should be made before the maturity date and within one year. You’ll need to fill out a form for the extension, which must be submitted at the same branch where the account was opened. Failure to submit the extension form on time will prevent you from making further contributions.
Start Investing Early to Become a Millionaire
If you begin investing in the PPF scheme at age 25, you can become a millionaire by age 50. If you start at 30, you will achieve millionaire status by age 55, securing your financial future as you grow older.
Disclaimer
This article is for informational purposes only and does not constitute financial advice. PPF calculations are based on the current 7.1% interest rate, which is subject to change. Readers should consult a financial advisor and verify details before making investment decisions.