PPF calculator: Invest ₹1.5 lakh a year and here's exactly when you'll hit ₹1.54 crore

The Public Provident Fund (PPF) is a popular long-term savings scheme that offers stable returns, tax-free interest, and Section 80C tax benefits. A lot of investors are curious to know if investing the maximum amount of Rs 1.5 lakh every year can help them build a Rs 1.54 crore retirement corpus.

The government currently offers 7.1% annual interest on PPF deposits. The interest is calculated every month and credited to the account at the end of each financial year.

PPF has a 15-year maturity period, which can be extended in five-year blocks with contributions. Assuming a 7.1% interest rate throughout the investment period and an annual investment of Rs 1.5 lakh is made by April 5 every financial year, the corpus grows to Rs 40.68 lakh in 15 years and Rs 66.58 lakh in 20 years. This shows that a Rs 1.54 crore corpus cannot be created in either 15 or 20 years.

To accumulate around Rs 1.54 crore, an investor needs to invest Rs 1.5 lakh every year from age 30 till age 60. This requires 3 five-year extensions after the initial 15-year maturity period. The calculation also assumes that the PPF interest rate remains at 7.1% throughout the investment period.

The illustration is based on the following assumptions:
● Starting age: 30 years
● Investment till: 60 years
● Annual investment: Rs 1.5 lakh
● Interest rate: 7.1% per annum
● Investment period: 30 years
● Estimated corpus at age 60: Rs 1.54 crore (approximately)
● Total investment: Rs 45 lakh
● Estimated interest earned: Rs 1.09 crore

These calculations assume that the investor contributes Rs 1.5 lakh as a lump sum by April 5 every financial year to maximise the interest earnings. They also assume that the PPF interest rate remains unchanged at 7.1% throughout the 30-year period. Actual returns may differ if the government revises the PPF interest rate in future.