PPF (Public Provident Fund) is small saving scheme which has Central Government backing.

Understanding PPF

  • PPF accounts are generally opened for 15 year term
  • PPF account can be extended by 5 years block with or without contribution.
  • If offers tax rebate / saving on contribution under sect 80C
  • The minimum deposit that you need to make in a year is Rs. 500 and maximum limit is Rs. 150,000
  • The maturity amount and Interest is tax free
  • Partial Withdrawal and Loan facility is available after completion of 6 years.

Power of Compounding

  • The biggest advantages of PPF account is power of compounding.
  • Compounding of interest is nothing but computing interest on the initial amount invested and also on the accumulated interest of previous periods.
  • In compounding the most important factor is Time for which you remain invested.
  • So start early and be invested for long.
  • If you invest 1.5 Lakhs /year for 30 years, with 8.5% interest it become 2 Cr. That’s that power of compounding.

A famous Einstein quote goes “He, who understands the power of compounding, earns it and he who doesn’t pays it”.

So take advantage of compounding.

PPF Calculator

  • There are many calculators available to calculate the PPF maturity amount.
  • I have created a simple one, you can customize as per your requirement
  • Download Link : PPF Calculator

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