At the current 7.1% interest rate, an investor who deposits Rs 1.5 lakh annually for 20 years in PPF can build a tax-free corpus of over Rs 66 lakh. Out of the maturity amount, nearly Rs 36.58 lakh will come purely from interest earnings. To get the maximum benefit of the PPF interest rate, an investor needs to invest Rs 1.5 lakh every financial year till April 5. The PPF interest rate is also open to quarterly review and the government may change it in the future. For our calculations, we are assuming the PPF rate to be unchanged.
Yearly investment-Rs 1,50,000
Time period- 20 years
Interest rate- 7.1%
Total interest earned-Rs 36,58,288
Maturity value- Rs 66,58,288.
