For investors seeking safe, long-term, and tax-efficient returns, the Public Provident Fund (PPF) remains one of the most reliable government-backed investment options. Falling under the EEE (Exempt-Exempt-Exempt) category, PPF offers tax-free contributions, interest, and maturity payouts—making it ideal for wealth creation.
With strategic planning using the 15+5+5 extension rule, investors can accumulate a corpus of ₹1 crore and enjoy ₹60,000 monthly tax-free income, all while avoiding market risks.
Maximize Returns with the 15+5+5 Rule
The standard PPF tenure is 15 years, but what many investors overlook is the flexibility to extend it twice, for 5 years each, with or without fresh contributions. This long-term approach harnesses the power of compounding to create a substantial retirement corpus.
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Year 1–15: By investing ₹1.5 lakh annually, the fund grows to ₹40.68 lakh.
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Year 16–25 (with extension): Continued investment leads to a total corpus of ₹1.02 crore, assuming a 7.1% annual interest rate.
This strategy allows investors to build a ₹1 crore fund by simply being consistent over 25 years.
Monthly Income of ₹60,000 — Tax-Free
After completing the 25-year accumulation phase, investors can extend the PPF for another 5 years without contributions. During this time:
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The accumulated ₹1.02 crore earns 7.1% annual interest, generating approximately ₹7.31 lakh annually.
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Divided monthly, this amounts to about ₹60,941 per month, tax-free.
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Investors can withdraw once annually, giving flexible access to income without eroding capital.
This creates a stable, tax-free retirement income, backed by sovereign guarantee.
Secure, Government-Regulated & Market-Risk Free
PPF is regulated by the Government of India, with interest rates revised quarterly. The current interest rate stands at 7.1% per annum, offering strong returns without any exposure to stock market fluctuations.
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Minimum deposit: ₹500 annually
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Maximum deposit: ₹1.5 lakh annually
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Frequency: Up to 12 installments in a financial year
This makes PPF accessible for both salaried individuals and small investors.
Additional Benefits: Loan Facility in Emergencies
PPF also offers liquidity through loan facilities between the 3rd and 6th financial year:
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Loan amount: Up to 25% of account balance
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Interest rate: Just 1% above prevailing PPF interest rate
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No need to break your long-term plan during emergencies
This ensures financial flexibility even in unforeseen circumstances.
Why PPF Remains a Cornerstone of Indian Financial Planning
Public Provident Fund is one of the few instruments that provide guaranteed returns, tax exemption, and long-term growth all in one. With strategic use of its extension and withdrawal features, it can serve as both a retirement fund and a monthly income source post-retirement.
Whether you’re just starting your career or planning for retirement, the PPF account provides financial discipline, security, and tax savings—hallmarks of a strong personal finance strategy.
Author Profile
- My name is Kuldeep Singh Chundawat. I am an experienced content writer with several years of expertise in the field. Currently, I contribute to Daily Kiran, creating engaging and informative content across a variety of categories including technology, health, travel, education, and automobiles. My goal is to deliver accurate, insightful, and captivating information through my words to help readers stay informed and empowered.
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