PPF monthly income: How to amass more than Rs 1 cr and then earn Rs 60k every month

Kolkata: PPF is one of the most trusted long-term investment instruments in India. Suppose a person invests Rs 1.50 lakh every year for 15 years. He/she will end up creating a pool of Rs 40,68,209 (or Rs 40.68 lakh). In this pool, his own nominal investment will be Rs 22,50,000 and the interest component will be Rs 18,18,209. We are assuming that the rate of interest in PPF remains unchanged at 7.1%, where it has been for the past few years. You can use the PPF calculator for such estimates.

However, PPF rules allow one to continue the investments far beyond the 15 years and there is no need that one should close the account and take out the money. The rules say that PPF account should be extended by blocks of 5 years. It means that one should continue investment for 20 year, or 25 years or 30 years etc. One remarkable feature of PPF is that it has always enjoyed a sovereign guarantee and, therefore, your funds enjoy the highest possible safety.

How much will I get after 15, 25, 30 years in PPF

There is no upper limit to end the investment. Considering someone continues investment for 25 years – at the rate of Rs 1.5 lakh a year – he/she will end up with Rs 1,03,08,015. In this pool, Rs 65,58,015 will accrue through interest income while Rs 37,50,000 will be the nominal amount invested by the account holder. Now consider the interest on Rs 1,03,08,015. If we assume that the rate of interest in PPF remains at 7.1% per annum, then in one year, the amount of interest a principal of Rs 1,03,08,015 will generate, the interest works out to Rs 7,31,869. It works out to Rs 60,989 a month.

Is PPF a good investment: How to get Rs 60k plus a month

The rules of PPF allows the account holder to withdraw money once a year – and that too free from tax. The reason: PPF is a scheme that falls in the E-E-E category. What is means in short is that, if you can invest Rs 1.5 lakh for 30 years, you will build a corpus that will pave the way for a monthly pension of almost Rs 61,000 – not an insignificant amount by any yardstick. This is exactly the reason why one uses PPF for retirement savings.

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