According to reports from The Economic Times, a 20-year-old investor can build a retirement corpus of more than ₹1 crore through the Public Provident Fund (PPF) by investing ₹46,000 every year, equivalent to around ₹3,833 a month and about ₹126 a day. At the current PPF interest rate of 7.1 per cent per annum, the investment can grow to an estimated ₹1,00,92,296 by the age of 60. The calculation assumes the investor starts investing at the age of 20, contributes ₹46,000 every year for 40 years, and the PPF interest rate remains unchanged at 7.1 per cent throughout the investment period.
As reported by The Economic Times, the government currently offers an interest rate of 7.1 per cent per annum on PPF deposits. Interest is calculated every month on the lowest balance between the fifth day and the last day of the month and is credited to the account at the end of each financial year. PPF also offers tax benefits under Section 80C of the Income Tax Act, with the interest earned and the maturity amount being tax-free under existing tax rules. The annual contribution of ₹46,000 is well within the current maximum investment limit of ₹1.5 lakh in a financial year under the PPF scheme.
According to the PPF calculator analysis, the required investment increases significantly for later start ages. As reported by The Economic Times, starting at age 25 requires contributing about ₹66,500 a year (₹5,542 monthly, ₹182 daily) for a corpus of about ₹1 crore by age 60. Starting at 30 requires ₹1 lakh annually (₹8,333 monthly, ₹274 daily), while starting at 35 requires the maximum annual limit of ₹1.5 lakh (₹12,500 monthly, ₹411 daily).
The PPF calculator illustration is based on specific assumptions including starting age of 20 years, retirement age of 60 years, investment period of 40 years, annual investment of ₹46,000, and the current PPF interest rate of 7.1 per cent per annum. As reported by The Economic Times, the total investment amounts to ₹18.40 lakh, while the estimated interest earned is ₹82.52 lakh. The calculation assumes the investor contributes the required amount every year without interruption and makes the investment early in the financial year to maximise interest earnings, with no withdrawals before maturity.
