PPF Calculator: How Long Should You Stay Invested To Create A Maturity Corpus of Rs 1 Cr?

Public Provident Fund (PPF) is among the most well-liked government-backed post office schemes for long-term investors with conservative risk profiles. The justification for this is that PPF investments qualify for Exempt-Exempt-Exempt or EEE status; to open an account, a minimum annual contribution of Rs. 500 is required. For Q1FY24, PPF is giving an annual interest rate of 7.1% (compound annually), and the interest gained is exempt from taxation under the Income Tax Act. Deposits can be made in one lump sum or over time, and they are eligible for a deduction under section 80C of the Income Tax Act. PPF can also be extended for further block of 5 years and so on within one years of maturity, which makes it a good bet for long term investment. So taking the long term perspective, here's how long time it will take to get a maturity corpus of Rs 1 Cr through PPF. Let's take suggestions from analysts piled below.

Aniruddha Bose, Chief Business Officer, FinEdge

To create a maturity corpus of 1 Crore from your PPF investment over a 15-year period, one would need to save around Rs. 30,000 per month for the entire duration. However, do keep in mind that PPF rates vary based on underlying interest rates, so this is just an indicative figure. Alternatively - since it is not mandatory for you to withdraw your PPF balance at the end of the 15-year tenor, you could invest a smaller amount every month and then let the balance accrued interest. For instance - if you save Rs. 10,000 per month in your PPF account for 15 years and leave the accrued balance untouched for another 15 years, you will end up close to the 1 Crore mark in 30 years from today. However, do keep in mind that it is not a smart decision to invest money for 15-30 years in fixed income products. You are much better off leveraging the power of equities that will help you benefit from the power of compounding and rupee-cost averaging over such long timeframes. The difference in corpus can be be exponentially higher if you can effectively manage your behavioural biases by following a goal-based approach and implementing correct investing principles.

Santosh Navlani - COO, ET Money

The magic of the government-backed debt investment instrument, Public Provident Fund (PPF) is known to only those investors who are disciplined and patient. PPF has the potential to make you a crorepati. Let's see how.The time period to reach Rs 1 Crore will depend on how much money you invest and for how many years. But remember, you can only invest a maximum of Rs 1.50 lakh per year in PPF. Also, there is a lock-in period of 15 years for the investment. However, after 15 years, you can extend your PPF account in blocks of 5 years.Here are 3 scenarios of how you can become a crorepati by investing in PPF:

Case 1: Start investing as soon as you start earning

If you start investing as soon as you begin earning, say, at the age of 25, and you continue investing for 35 years, you will need to invest Rs 5,550 per month. By the time you retire, this investment can help you become a crorepati. We have considered a conservative interest rate of 7% per annum in our calculations.

Case 2: Start investing in PPF at Age 30

If you begin investing a bit later, at around 30 years old, you will need to invest Rs 8,200 per month to become a crorepati by the time you retire.

Alternatively, look at the above data as- so, if you want to reach your dream corpus of Rs 1 crore earlier, you can start investing a higher amount of Rs 8,200 per month at the age of 25. Keep investing for 30 years, and you will achieve your target amount at age 55.

Case 3: Invest Rs 1.50 Lakh p.a. in PPF

Let's say you invest the maximum amount allowed, which is 1.5 lakh rupees, in PPF every year. That's about 12,400 rupees per month. With a 7% annual return, you can accumulate a corpus of 1 crore rupees in 25 years.

Aashika Jain, financial expert and editor at Forbes Advisor

The Public Provident Fund (PPF) is the most relied-upon savings scheme by the Government of India. Investments made in PPF are considered safe, stable and risk-free as they are backed by sovereign guarantee.

To be able to create a corpus of INR 1 cr via PPF, you simply need to park INR 1 lakh per annum on a yearly basis in your PPF account. At a rate of 7.1%, your investment will result in a corpus of INR 1 cr at the end of a 30-year tenure. It is noteworthy that the PPF falls under the exempt-exempt-exempt investment category which means all the three important quotients: the principal invested, the interest earned, and the amount at maturity are all tax-free.

Shweta Rajani, Head - Mutual Funds, Anand Rathi Wealth Limited

PPF offers 7.1% interest rate to its investor and its interest and maturity amount is tax free under section 80C. It has a lock in period of 15 years and maximum invest per year is Rs. 1.5 Lakh. If you invest Rs. 1.5 lakh every year to reach Rs. 1 crore, it will take you 25.5 years to reach your goal.