PPF Calculator: Your Rs 200 can become Rs 49.47 lakh! Make money while you sleep

PPF Calculator: Most people are so caught up in their daily jobs that they fail to realise that there are so many opportunities to make more money slipping by. Yes, people can get money from alternative options apart from their salaries. In fact, even as they sleep, people can make money! How? Well read on. So, at a time when stock markets are behaving abnormally and have shed around 30 per cent in the last one and a half months, investors should realise how important a diversified portfolio really is. That means, they should have invested in small savings schemes that are backed by the government. Among them  is the Public Provident Fund (PPF) scheme. 

Here an investor not only saves income tax on investment up to Rs 1.5 lakh in a financial year (if the taxpayer has chosen the old income tax slabs), the PPF interest rate still gives 7.1 per cent assured guaranteed return to account holders! Yes, even as they sleep, their wealth can increase. Importantly, PPF is a great alternative tool to create wealth that will ensure enough money in future for the subscribers of this scheme. The only thing required here is discipline to keep investing and patience. This is no get-rich-quick scheme.

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Speaking on how investors should include PPF account in their portfolios, Manikaran Singhal, a SEBI registered tax and investment expert said, "PPF account should be used for long-term investment goals as it has a maturity period of 15 years. But, I would advise PPF account holders to continue investing in the PPF account till they are earning, may be for 25 years. If they do so, they will be able to get compounding benefits ion their investment as they will be able to get interest on the PPF interest accumulating in their PPF account." Yes, benefit upon benefit!

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On how to continue investing in the PPF account even after 15 years have passed and maturity of scheme has been reached, Balwant Jain, a Mumbai-based tax and investment expert, explained, "One can increase the PPF account maturity period for five years by submitting Form-H within one year of the maturity. This Form-H submission will enable the PPF account holder to continue investing in the PPF account and get PPF interest accumulated in their PPF account." Jain said there is no limit on extension of the PPF account maturity but every time investors will have to submit Form-H within one year of the PPF account maturity. Means, if a PPF account completes 15 years, it can still be extended for next five years by submitting Form-H and after completion of next five years, the same can be extended for a further five years.

If earning individuals start investing in PPF account in early phase of career, they can definitely be able to invest in PPF account for 25-30 years. Since, there is a growing tendency to retire around 55 years, let's assume that a PPF account is opened at 30 years of age. Investment in this PPF account goes on for 25 years. If investment is Rs 6,000 per month, this money will grow to Rs 49,47,847 PPF account balance after 25 years - here we are assuming PPF interest rate at 7.1 per cent per annum . So, your Public Provident Fund can help you get Rs 49,47,847 through Rs 6,000 per month or Rs 200 per day (pd) investment.

Hence, it's advisable for the investors to have a diversified portfolio and when it comes to retirement fund, there should be some investment tools that have assured returns and PPF can be that tool, as the above-mentioned PPF calculation suggests.