PPF Calculator: How to get Rs 66,270 income a month from PPF investment? Get details
PPF Calculator: Investment in Public Provident Fund (PPF) creates tax-free income. After 15 years of the maturity period, one can draw income even without investing a single rupee in PPF.
PPF Calculator: Public Provident Fund (PPF) is a popular scheme among investors who want to create a retirement corpus through a non-market-linked investment scheme. It provides guaranteed return, compound interest, and a tax-free corpus that can fulfil the retirement needs of a PPF account holder. For investors seeking a debt option to diversify their portfolio, PPF can be one of the schemes. It can also be used to draw regular income from the investment.
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Disclaimer: This is not investment advice. Do your own due diligence or consult an expert for financial planning.)
How one can contribute to PPF
One can open a PPF account in a bank or a post office with a minimum investment of Rs 500. This is also the minimum amount one needs to deposit in a financial year to continue their PPF account.
Does it offer monthly or lump sum investment?
An investor can choose either way. They can make unlimited instalments in a financial year in multiples of Rs 50.
Maximum PPF investment in a financial year
The maximum investment in a financial year should not exceed Rs 1.50 lakh.
PPF extension rules
The account has a maturity period of 15 years. After that, one can make unlimited extensions of 5 years each.
Withdrawal rules during extensions
After 15 years, one can withdraw the entire amount. But if they want to continue the amount, they can do so with and without making further contributions to their PPF account.
Will they get interest if they don't contribute to PPF?
PPF account holders will keep getting interest even if they don't deposit any amount during extension periods of the account.
How to get Rs 66,000 income a month from PPF
One needs to deposit Rs 1.50 lakh in a financial year for 15 years. To make the most of the investment, they need to make the deposit of the entire amount between April 1-5 every financial year. This way, they will get interest for the entire year.
PPF corpus after 15 years
After 15 years, the investment will be Rs 22,50,000, estimated interest will be Rs 18,18,209, and the estimated maturity value will be Rs 40,68,209.
On completion, they need to extend their account for 5 years and keep making contributions of Rs 1.50 lakh in a financial year for the next 5 years.
PPF corpus after 20 years
After 20 years, the investment will be Rs 30,00,000, the estimated interest will be Rs 36,58,288, and the estimated maturity will be Rs 66,58,288. At this stage, they need to take another extension of 5 years.
PPF corpus after 25 years
After 25 years, the total investment will be Rs 37,50,000, the estimated interest will be Rs 65,58,015, and the estimated corpus will be Rs 1,03,08,015. Here, they need to take another extension of 5 years and invest Rs 1.50 lakh in the 26th financial year.
PPF corpus after 26 years
After 26 years, their invested amount will be Rs 39,00,000, the estimated interest will be Rs 73,00,534, and the estimated corpus will be Rs 1,12,00,534.
What will happen after that?
Even if one doesn't make any contribution after that, they have the option to make one withdrawal every financial year. At 7.1 per cent interest rate, the interest amount on a Rs 1,12,00,534 corpus will be Rs 7,95,237.914. On a monthly basis, this will be equal to Rs 66,270.