Most people dream of becoming a millionaire and look for the best investment options to earn high profits. If you want to know how much you can earn from your investment and also save on income tax, then the Public Provident Fund (PPF) is a great option for you.

This scheme not only offers good returns (as per the PPF maturity calculator) but also provides tax-saving benefits. If you are planning for retirement or looking for a long-term investment with good returns, then PPF is a reliable choice. This scheme is popularly known as PPF.

Why is PPF a Good Investment Option?

The Public Provident Fund (PPF) is one of the most popular investment schemes because the deposited amount, the earned interest, and the maturity amount are completely tax-free. This scheme falls under the EEE (Exempt-Exempt-Exempt) category, which means:

  1. You can claim a tax exemption on your deposit every year.
  2. The interest earned each year is also tax-free.
  3. The entire maturity amount is exempt from tax.

Who Can Invest in PPF?

  • Any Indian citizen can invest in this small savings scheme.
  • The account can be opened at a post office or any bank.
  • The minimum investment is ₹500 per year, while the maximum limit is ₹1,50,000 per financial year.
  • Interest is calculated annually, but the rate is fixed quarterly. Currently, PPF offers 7.1% interest.
  • The maturity period of PPF is 15 years.
  • Joint accounts are not allowed, but a nominee can be added.
  • In the case of minors, a guardian can open the account, but it remains valid only until the child turns 18.

How Can PPF Make You a Millionaire?

PPF works on compound interest, making it an excellent long-term investment. Here’s an example:

  • Suppose you start investing at 25 years old and deposit ₹1,50,000 (maximum limit) between 1st to 5th April at the beginning of every financial year.
  • At the start of the next financial year, your account balance will be ₹1,60,650, including ₹10,650 earned as interest.
  • Repeating the same investment the next year will increase your balance to ₹3,10,650.
  • In the third year, interest will be calculated on the entire amount, and this time, you will earn ₹22,056 as interest due to compound interest.

Now, after 15 years, your total balance will be ₹40,68,209.

  • Your total deposit: ₹22,50,000
  • Interest earned: ₹18,18,209