Post Office PPF Investment Return: How much interest will you get on depositing ₹ 5,000 every month in Post Office PPF?

To create long term safe savings, risk-free returns and 100% guaranteed fund, Post Office’s Public Provident Fund (PPF) scheme remains the first choice of middle class families and salaried people across the country. Being backed by the Government of India, the capital deposited in it remains completely safe. If you are planning to deposit ₹5,000 every month (₹60,000 annually) in a post office PPF account, it is important to understand the financial mathematics of how much interest you will get and what will be the total maturity amount after the completion of the mandatory lock-in period of 15 years.

Currently on PPF by the Central Government 7.1 percent annual interest rate (Compounded Annually) Is being given.

• Monthly Calculation and Annual Credit: Interest in PPF is calculated every month, but it is credited to the account at the end of the financial year (31st March).

• ‘Golden Rule’ of date 5: As per PPF rules, of the month From 5th to last date The interest for that month is decided on the lowest balance in the account between Rs. So if you deposit ₹5,000 every month, transfer it between 1st and 5th only, so that you can get interest on that amount from the same month.

The minimum maturity period of a PPF account is 15 financial years. If you contribute ₹5,000 per month (₹60,000 annually) for 15 consecutive years:

• Monthly Investment: ₹5,000

• Annual Investment: ₹60,000

• Total principal deposited in 15 years: ₹9,00,000 (9 lakh rupees)

• Total interest earned (at 7.1%): ₹7,27,284 (approx)

• Total maturity amount after 15 years: ₹16,27,284 (Approximately ₹16.27 lakh)

That means, in 15 years, you get a net interest profit of more than Rs 7.25 lakh on your total deposited capital, and your fund becomes worth Rs 16.27 lakh.

The biggest feature of the PPF scheme is that after completion of 15 years, you can extend it in blocks of 5 years. The real magic of compounding is seen only after 15 years:

If you continue this for 25 years, your total investment will be only ₹15 lakh, but the interest earned on it will be ₹26.23 lakh, making your total fund ₹41.23 lakh Will cross.

PPF under income tax ‘Exempt-Exempt-Exempt’ (EEE) FD status, which makes it much better than Fixed Deposit (FD):

1. Rebate on investment: Under Section 80C, tax deduction is available on investments up to ₹ 1.5 lakh per year.

2. Zero tax on interest: The interest received every year is completely tax-free (no TDS is deducted on it).

3. Tax-free withdrawal on maturity: When you withdraw the entire money after 15 or 25 years, you do not have to pay even a single rupee of income tax on it.

Apart from this, in case of emergency, cheap loan on PPF balance from the third financial year of account opening and partial withdrawal facility on completion of 6 years is also available.