Public Provident Fund Calculation 2020: Rs 1 crore with PPF possible? Check scenarios

Public Provident Fund Interest Rate 2020: Proving the rumours wrong, the government decided to keep the small savings schemes interest rates, including Public Provident Fund, unchanged for January-March quarter of FY 2019-20. Earlier, it was reported that the government may slash the small savings schemes interest rates. So, as per new rates, the PPF deposits will continue to earn 7.9 per cent interest, compounded annually.

The PPF interest rate has remained around 8 per cent for the last five years. While this may change in future, we can look at different scenarios in which you can accumulate up to Rs 1 crore, assuming 7.9 per cent interest.

Starting PPF account at 25 years

At 7.9 per cent interest, you can accumulate Rs 10539305.12 in 35 years by depositing Rs 5000 per month.

If you deposit the maximum Rs 1.5 lakh/year in PPF account, starting from the age of 25, you may get around Rs 27276141 after 35 years (or at the time of your retirement.

ALSO READ | Modi govt notifies Public Provident Fund Scheme 2019: Check key PPF features

Starting PPF account at 30 years

If you start depositing in PPF at the age of 30 then you can accumulate Rs 1 crore after 30 years by depositing Rs 7189 per month at 7.9 per cent interest.

By depositing the maximum Rs 1.5 lakh/year in PPF account, starting from the age of 30, you may get around Rs 1,80,01,938 after 30 years (or at the time of your retirement.

PPF account matures after 15 years. If you start depositing Rs 1.5 lakh in PPF, then after 15 years, you may get over Rs 43 lakh on maturity.

The amount deposited in PPF account, interest earned and the maturity amount withdrawn are tax-free.

The government recently notified new Public Provident Fund (PPF) rules. Named Public Provident Fund Scheme 2019, the new rules have replaced all previous PPF rules with immediate effect

Source: Financial Express