Building wealth safely demands a long-term plan and a keen eye for the right investment avenues, be it mutual funds, fixed deposits, stocks or Public Provident Funds (PPF). Amidst the wide array of investment options available, PPFs are worth considering due to their unique features and benefits, such as its low-risk profile, tax efficiency, and decent returns, making it a preferred choice among conservative investors.
An essential tool for utilizing this investment avenue is the PPF Calculator. It provides an approximation of the returns you would gain through PPF investments. The PPF Calculator utilizes the principle of compound interest over the tenure of the investment, factoring in fixed deposits made annually in Indian Rupees.
While interest rates on PPFs are revised quarterly by the Government, the current prevalent rate is 7.1% per annum (compounded annually). Assuming an annual investment of INR 1.5 lakh (the current upper limit), you would approximately accumulate INR 43 lakh over a 15-year period. A large part of this sum (more than INR 20 lakh) arises from compound interest, outlining the benefits of a long-term investment. These calculations are easy with the use of a PPF calculator.
When using a PPF calculator, some main factors are considered: the annual investment, the tenure of the investment, and the interest rate. Let's comprehend this better with an example.
Suppose you decide to invest INR 1 lakh annually in a PPF account. Given the current interest rate of 7.1%, if we input these values into the PPF calculator, it shows an impressive maturity amount of approximately INR 31 lakh after the15-year period. A significant slice of this maturity amount is due to the power of compounding. The longer your investment horizon, the larger the compound interest component, reinforcing the concept of long-term investing.
Make the PPF calculator your friend and regularly check the probable returns on your PPF account. Bear in mind that PPFs also provide tax benefits under Section 80C of the Income Tax Act, allowing tax deductions of up to INR 1.5 lakh per year. The interest earned and the maturity amount are also exempt from tax, making PPF quite attractive.
With this smart and safe investment, regular long-term contributions combined with the power of compounding, your pathway to wealth-building can become smoother.
Leveraging the PPF calculator can make the journey of wealth-building steady and transparent, allowing superfine control over your investments. However, it's pivotal to adapt to the changes in financial markets and subscribe to multiple investment options, forming a diverse financial portfolio to cushion against unforeseen market variables.
While the PPF calculator is a useful instrument, the investor must cautiously gauge and acknowledge all the pros and cons of investing in the Indian financial market. Investing requires prudent decision-making and thorough financial planning based on personal financial conditions and long-term financial goals.
Building wealth safely requires a strategic and long-term approach. One of the popular investment options to consider is Public Provident Funds (PPF) due to their low-risk profile, tax benefits, and decent returns. The PPF calculator provides an estimate of the returns you can achieve from your PPF investments, offering transparency and control over your financial plans. Make the most of the PPF calculator, remembering to contribute regularly and for the long-term for optimal returns. However, despite the myriad benefits, investors must judiciously consider all the facets of investing in the ever-changing Indian financial market.Disclaimer: This content is part of a marketing initiative. No TNIE Group journalists were involved in the creation of this content.
Disclaimer: This content is part of a marketing initiative. No TNIE Group journalists were involved in the creation of this content.