PPF Regular Plan: If you are looking for a way to earn a safe and guaranteed income, then Public Provident Fund (PPF) can also be very useful for you. By investing in it, you can arrange for a regular income of Rs 60,000 per month after retirement. This is a method that even big experts will not be able to tell you. Know here how it will work.
How will this Jugaad work?
You can deposit a maximum of Rs 1.5 lakh in a year in PPF. Currently, this scheme is getting 7.1% interest and this interest increases on the basis of compounding. The maturity period of PPF is 15 years, but you have to extend it twice in blocks of 5 years each and continue the investment. Meaning, you have to continue investing Rs 1.5 lakh in it for 25 years.
1 crore fund will be accumulated in 15 years
When you invest 1.5 lakh rupees annually in PPF for 25 years, your total investment will be Rs 37,50,000 and you will get interest of Rs 65,58,015 at the rate of 7.1 percent. In this way, you will have a total of Rs 1,03,08,015 in your PPF account.
Know what you have to do now
You do not have to withdraw this money from the account even after 25 years. If you do this, then whatever amount is deposited in your PPF account, it keeps earning interest as per the calculation of PPF. In such a situation, you can withdraw the entire amount from this account anytime or you can withdraw once a year.
This is how you can arrange for an income of Rs 60,000
If you keep the entire Rs 1,03,08,015 in the account, then at the rate of 7.1%, you will earn Rs 7,31,869 from interest. You can withdraw only the interest amount annually. If Rs 7,31,869 is divided for 12 months, then it will be Rs 60,989. In this way, you can arrange for Rs 60,989 every month. Also, a fund of Rs 1,03,08,015 will remain in your account.
Remember this in case of extension
Let us tell you that to extend the PPF account with contribution in blocks of 5 years each, you will have to submit an application to the bank or post office, wherever you have an account. You will have to submit this application before the completion of 1 year from the date of maturity. Take special care of this to continue contributing to the PPF account for 25 years.
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