The chances of becoming a millionaire through savings schemes like PPF and NPS depend on when one starts saving. In other words, the sooner you start investing in PPF and NPS schemes after getting a job, the bigger the benefits in the long run.
New Delhi. Large amount of money can be raised through small savings and investments over a long period of time. Be it equities, mutual funds, bonds or any other government scheme, investing for a long time in all gives good money. The purpose of such savings can be to fulfill several goals. These include reasons from retirement planning to children’s education and marriage etc. Two schemes are particularly beneficial for all these goals. These are Public Provident Fund Account (PPF) and National Pension Scheme (NPS). Because good interest is also available in these long-term savings schemes. But is it possible that both these schemes can make an investor a millionaire?
However, the chances of becoming a millionaire through these savings schemes depend on where and when you start saving. In other words, the sooner you start investing in PPF and NPS schemes after getting a job, the bigger the gains in the long run and the amount can be in lakhs or crores, but depending on your investment contribution.
Invest in PPF and NPS like this, you will become a millionaire!
Public Provident Fund and National Pension Scheme, both these schemes are supported by the central government. The main difference between the two is that PPF gives fixed returns and NPS returns are market-linked i.e. the risk can be high and the returns can also be high.
The current interest rate available on PPF is 7.1 percent. Through this, a millionaire can become a millionaire in a period of 25 years by investing a maximum of 1.5 lakhs per annum every year. However, the tenure of the PPF account is 15 years and on maturity the PPF will deposit only 40.6 lakhs to the investor. Therefore, to reach the figure of one crore, the investor will have to extend the PPF account twice in a block of 5 years and this amount will increase to 1.03 crores. Keep in mind that it is not necessary that the rate of interest on the PPF account remains the same for 25 years. Hence the return on maturity may get affected.
