Post Office Scheme / This government scheme is amazing– you can earn up to Rs 60,000 every month

Post Office Scheme: Among the many government savings schemes offered by the Post Office, the Public Provident Fund (PPF) is a very popular and reliable scheme. This scheme not only offers excellent long-term interest rates but also offers tax benefits. With regular and disciplined investments, this scheme can transform you from a lakhpati to a crorepati. In this article, we'll learn how to build a corpus of ₹1.03 crore through PPF in 25 years and generate a regular income of ₹61,000 per month.

Features of PPF

• Interest Rate: Currently, PPF offers an interest rate of 7.1% per annum, which is compounded.
• Tax Benefits: Investments up to ₹1.5 lakh per year are tax deductible under Section 80C of the Income Tax Act.
• Safety: PPF is a government scheme that is completely safe and risk-free.
• Flexibility: Anyone, whether employed, engaged in business, or investing for children, can start investing in this scheme.
• Investment Period: The basic tenure of a PPF account is 15 years, which can be extended by 5 years each.

How to create a fund of ₹1.03 crore?

To understand the investment strategy in PPF, we will calculate based on a period of 15 years + 5 years + 5 years. Let's assume you invest ₹1.5 lakh (maximum limit) every year. Let's understand this step-by-step:

• Investment for the first 15 years:
• Annual investment: ₹1.5 lakh
• Total investment (15 years): ₹22.5 lakh
• Interest rate: 7.1% (compounded)
• Total amount after 15 years: ₹40.68 lakh
• Interest on: ₹18.18 lakh

Next 5 years (without new investment):

If you don't make any new investments for the next 5 years and let the funds remain in the account, the amount will grow due to compound interest:

• Total amount: ₹57.32 lakh
• Additional interest: ₹16.64 lakh
• Further 5 years (without new investment):

If you let it remain in the account for another 5 years, the amount will grow:

• Total amount: ₹80.77 lakh
• Additional interest: ₹23.45 lakh Lakh
• Continuous investment for 25 years:

If you continue to invest ₹1.5 lakh every year for the entire 25 years, then:

• Total investment: ₹37.5 lakh
• Total amount: ₹1.03 crore
• Interest contribution: ₹65.5 lakh

Regular income of ₹61,000 every month

After 25 years, when you have a corpus of ₹1.03 crore, if you leave it in the PPF account, you will earn an annual interest of ₹7.31 lakh at an interest rate of 7.1%. That is:

Monthly income: ₹7,31,000 ÷ 12 ≈ ₹60,941

Significant thing: Your original corpus of ₹1.03 crore will remain completely safe, and you can receive regular income in the form of interest.

Why is investing in PPF beneficial?

• Tax Savings: Tax exemption under Section 80C on investments up to ₹1.5 lakh per year.
• Compound Interest: The magic of compounding multiplies your investment over the long term.
• Safe Investment: Being a government scheme, your money is completely safe.
• Long-Term Benefit: After the original 15-year term, you can further increase it with 5-year extensions.

Tips to Start Investing

• Invest Regularly: Invest a minimum of ₹500 every year and a maximum of ₹1.5 lakh.
• Start Early: The sooner you start investing, the greater the benefits of compound interest.
• Long-Term Perspective: PPF is designed for the long term, so be patient.
• Investing for Children: You can create a substantial fund for your children's future by opening a PPF account in their name.