PPF Investment 2025: There are many savings plans available for financial security after retirement. You can deposit a maximum of Rs 1.5 lakh per year in PPF. By doing this, you can get Rs 60,000 per month. What does this mean?
There are many savings plans available for financial security after retirement. One of the most trusted and widely used plans among them is the Public Provident Fund (PPF). Generally, people use it to get tax benefits and accumulate a large amount of money in the long run. But many people do not know that – PPF can also provide you with regular income. That is, you can earn a fixed amount every month after retirement through this account.
How does investing in PPF work?
You can deposit a maximum of Rs 1.5 lakh per year in PPF. Currently, the annual interest rate of this account is 7.1%, which is calculated on a compound basis. This means that not only the money you deposit, but also the interest earned on it, earns interest again. The initial tenure of a PPF account is 15 years, but you can extend this tenure twice in 5-year blocks. In this way, you can continue to deposit and invest money for a total of 25 years.
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How much will you get after 25 years?
If you keep depositing the maximum limit of Rs 1.5 lakh every year for 25 years, you will have invested a total of Rs 37.5 lakh. At a compound interest rate of 7.1%, your account will earn an interest of around Rs 65.58 lakh. This means that in total, a fund of over Rs 1.03 crore will accumulate in your account. This will provide a strong financial security for your retirement planning.
Even after maturity, you do not have to withdraw this amount immediately. Instead, if you keep the money in the account, it will grow further at the same interest rate. During this period, you can withdraw only the interest amount every year and use it for your monthly expenses. For example, if you continue to invest Rs 1.03 crore at the rate of 7.1%, you will earn Rs 7.31 lakh in interest per year. Dividing this by 12 months, you will get approximately Rs 60,989 every month. Importantly, during this period, your original fund will remain the same in the account, so you will continue to earn interest income in the coming years as well.
To increase your PPF account in 5-year blocks, you need to apply at a bank or post office. This application should be submitted within 1 year of the maturity of the account. If you miss the deadline, you may lose the opportunity to increase the account. Therefore, it is very important to complete this process on time. PPF, which is generally used as a savings scheme, can become a source of steady income for you after retirement if planned properly. By maintaining the investment for a long time, increasing the account on time and utilizing the interest properly, you can achieve financial security throughout your life.
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