PPF crorepati plan: How to build a corpus of Rs 1 crore

PPF is an instrument of savings and investments launched by the Government of India in 1968 to channelise savings from households into long-term investments. PPF is a safe investment tool to build the corpus for future needs that is backed by the government itself. Investment advisers have long suggested it as a safe tool to earn guaranteed returns with the advantage of saving tax.

The lock-in period of a PPF account is 15 years, which could be extended by two times for a 5-year period each. One of the features of the PPF facility is available for minors. In this article, the mantra to become a crorepati through PPF is mentioned. The mantra stands for disciplined investment over the years. If a person starts investing at the age of 25 years and with the current rate of 7.1 percent, he/she/they can become a crorepati at the age of 53 only through the PPF itself.

At first, it is difficult to believe that one can accumulate more than Rs 1 crore in PPF. However, disciplined and sustained investing along with power of compounding could produce the results in a very definitive manner. Since the investment tool carries sovereign guarantee one can do it with certainty.

If one invests an amount of Rs 10000 per month in PPF account for 28 years, one could build a corpus of Rs 1,05,44,142 (approx Rs 1.05 crore). If one increases their investment a bit and extend it to Rs 12,000 and continue the investment for same years, then the total amount would stands at Rs 1,26,52,971 (approx Rs 1.26 crore) an extra Rs 26 lakh with a modest increase in investment amount.

However, it is always advisable that one take the help of a personal finance adviser to determine when he/she would open a PPF account and how much he/she would contribute to it. One can invest a maximum of Rs 1.5 lakh in a PPF account in a financial year.