Deposit Rs 12500 per month, profit of Rs 1 crore, know the whole PPF scheme
PPF Investment Plan 2022: Deposit Rs 12500 per month, profit of Rs 1 crore, know the full plan If you want to become a millionaire after retirement, Public Provident Fund (PPF) can be a good option. It is important to note that the habit of investing should be developed in advance and investing should be done from scratch. Every month some money has to be deposited in PPF. If you keep investing for a long time, PPF can be considered the best instrument in terms of returns.
What is PPF? (PPF Investment Plan)
Public Provident Fund (PPF) is a government-sponsored small savings scheme that offers moderate returns. There is also the benefit of tax exemption. The interest and revenues earned from it are not taxable for income tax purposes. PPF can be invested in one go or in a maximum of 12 installments. The minimum investment for each financial year is Rs.500/- and the maximum is Rs.1.5 lakh. The current interest rate is 7.1 percent per annum and the term of the PPF account is 15 years.
Under the PPF rules, a maximum of Rs 1.5 lakh can be deposited in a year or Rs 12,500 in a month. The moment you retire, you need to plan how much money you will need and deposit money accordingly each month. In this era of inflation, PPF is the only instrument that pays more than 7 percent interest to depositors. Currently, savers get a 7.1 percent return on PPF accounts. The duration of the investment is 15 years, but can be extended afterwards.
How does PPF work? (How PPF works)
PPF is the best tax planning tool for salaried employees as deposits up to Rs 1.5 lakh per year are eligible for annual tax deduction under Section 80C of Income Tax Act, 1961. Like all other small savings schemes, the interest on PPF determined by the government. For January-March of FY2022, the interest rate on PPF is 7.1 percent.
how much money to deposit?
If you invest at a rate of Rs 12,500 per month for a 15-year term, the total amount will be Rs 40,68,209. In this you will get interest of Rs 18,18,209 and an investment amount of Rs 22.4 lakh. You can see here that slightly less has been added as interest in the amount you have deposited in 15 years. This quality of investment tools like PPF becomes a source of huge profits.
Please note that if you withdraw after 15 years of term, only Rs 40 lakh will be credited to your account. Thus, your dream of becoming a millionaire remains incomplete. If you want to make your dream come true, you have to keep investing without paying maturity.
You can raise more than Rs 1 crore by investing Rs 12,500 per month
By investing Rs 12,500 per month or Rs 1.5 lakh per year in PPF with a return of 7.10 percent, you can easily grow a corpus of more than Rs 1 crore in 15 years. However, you can increase the investment in 5-year blocks for maximum return.
how do you get 1 crore rupees
Consider this with an example. Ram Prakash, 30, started investing in PPF. Initially, he ran this scheme for 15 years, but after seeing the gains, he increased the PPF investment by 5 years. His deposit scheme therefore lasted 15 years and another 5 years. The total term of office will be 20 years and after so many years, Ram Prakash will get Rs 66,58,288. This amount is available upon deposit of Rs 12,500 per month.
After 20 years you see that Ram Prakash got only Rs 66.5 lakh. This means that they have to extend the investment period to Rs 10 million. After 20 years, Ram Prakash’s term is to be extended for another five years. In this way, after 25 years, Rs 1.03.08.015 will be added to Ram Prakash’s account. At the age of 30, Ram Prakash started depositing Rs 12,500 per month and at the age of 55, more than Rs 1 crore was deposited into his PPF account.
If you want to save a little less money, you have to start investing 30 years ago. As a result, the savings burden is slightly less and you will also become a millionaire on your 55th. If Rs 10,000 is deposited every month from the age of 25, then after 30 years of using the PPF account, Rs 1,23,60,728 will be deposited. And you don’t get that much money until you’re 55. Now you have to decide whether you want to become a millionaire by investing from the age of 30 or from the age of 25. Both must deposit the money for 55 years.
PPF Investment Plan Know the full plan
Assuming that you opened a PPF account between the ages of 25-30 and renewed it three times in a 5-year block, then you can easily complete the 30-year investment period before retirement. If you invest Rs 12,500 (Rs 1.5 lakh) in PPF every month for 30 years, the maturity will increase to Rs 1.54 crore after 25-30 years at the current rate of 7.1 percent. Of the Rs 1.54 crore, Rs 45 lakh is your own investment and the remaining Rs 1.09 crore comes as interest over a 30-year period.
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