To build your financial portfolio step by step, investing in the right instruments is of utmost importance. One such important instrument is the Public Provident Fund (PPF). It is a government-backed long-term investment alternative with attractive interest rates and completely tax-free returns. An effective way to plan your PPF investment is the PPF Calculator, a simple online tool that calculates the maturity value of your PPF investment.
About PPF
PPF is backed by the government and is one of the safest savings options in India. With a minimum deposit of INR 500 per year and a maximum limit of INR 150,000, the tenure of PPF is 15 years, which can be extended for another 5 years.
How PPF Calculator Works
Public Provident Fund Calculator calculates the maturity amount of your PPF investment based on factors like annual investment, returns, total investment tenure etc. Once you enter these parameters, the calculator can determine the final maturity amount at the end of your PPF term.
How to Use PPF Calculator
1. Regular Annual Investment: You can deposit any amount (within the given limits) into your PPF account depending on your financial capability. The minimum deposit is INR 500 while the maximum deposit is up to INR 1.5 million per year. Using the PPF calculator, you can find out the maturity amount you can expect if you deposit a certain amount regularly.
2. Duration: The vesting period of PPF is 15 years. However, you can extend it for another 5 years after this period. The PPF calculator accurately estimates your return for this period and is extremely helpful in planning your long-term goals.
3. Estimate your return: The PPF calculator helps you easily calculate the return you will earn under different scenarios. You can tailor your contributions to suit your financial goals by changing the annual contribution amount or period. Using the current annual interest rate of 7.1%, you can estimate the returns you can expect over the investment period.
Conclusion
Investing in PPF is an excellent way to save for the future with competitive interest rates and tax benefits under Section 80C of the Income Tax Act. The PPF calculator simplifies the process of predicting the outcome of your investments and makes it easier to make smart financial decisions. Please note that financial markets are unpredictable and therefore the calculator should be used only as a guide.