Investing ₹2,000 monthly means ₹24,000 yearly in PPF. Your 15-year maturity: ₹6,50,916 tax-free.
| Year | Deposit | Interest | Balance |
|---|
Investing ₹2,000 per month (totaling ₹24,000 per year) in PPF at 7.1% gives you a maturity of ₹6,50,916 after 15 years — all completely tax-free.
| Tenure | Total Deposited | Interest Earned | Maturity Value |
|---|---|---|---|
| 15 Years | ₹3,60,000 | ₹2,90,916 | ₹6,50,916 |
| 20 Years | ₹4,80,000 | ₹5,85,329 | ₹10,65,329 |
| 25 Years | ₹6,00,000 | ₹10,49,286 | ₹16,49,286 |
| 30 Years | ₹7,20,000 | ₹17,52,150 | ₹24,72,150 |
| 35 Years | ₹8,40,000 | ₹27,91,664 | ₹36,31,664 |
If you invest ₹24,000 per year in PPF at 7.1% for 15 years, your maturity value will be ₹6,50,916. This includes ₹3,60,000 total deposits and ₹2,90,916 in tax-free interest.
Deposits up to ₹1,50,000 per year qualify for Section 80C deduction. If you are in the 31.2% tax bracket (highest old regime), you can save approximately ₹7,488 in taxes every year.
To invest ₹24,000 per year in PPF, you need to set aside approximately ₹2,000 per month. You can make deposits in up to 12 installments per financial year.
After the initial 15-year lock-in, you can either withdraw the entire amount tax-free, or extend it in blocks of 5 years (with or without fresh contributions). The extended period also earns the prevailing PPF interest rate.
At 7.1% tax-free return, PPF significantly outperforms FDs for long-term investment. A comparable FD would need to offer 10.3% pre-tax returns (for 31.2% tax bracket) to match PPF's after-tax return. Over 15 years, this compounding advantage is substantial.