Earn Rs 40 lakh in 15 years via post office PPF scheme; here is the math

The Public Provident Fund (PPF), offered by India Post office, remains a top choice for risk-averse investors.

With a monthly deposit of Rs 12,500 (Rs 1.5 lakh annually), savers can build a tax-free slab of approximately Rs 40.68 lakh over 15 years, earning around Rs 18.18 lakh in interest at the current rate of 7.1% pa.

The PPF enjoys EEE (Exempt-Exempt-Exempt) status: investments are tax-deductible under Section 80C and both interest and maturity amounts are tax-free.

Backed by the Government of India, it offers a secure option for long-term goals like retirement or children’s education.

Minimum investment starts at just Rs 500 per year, making it accessible to all.

Public Provident Fund (PPF), offered by India Post (Post Office).

Monthly investment:

Deposit Rs 12,500 per month (i.e. Rs 1.5 lakh annually – the maximum allowed)

Investment tenure:

15 years (mandatory lock-in period). Can be extended in blocks of 5 years.

Interest Rate:

Currently 7.1% per annum (compounded annually), fixed by the government.

Total investment:

Over 15 years, the investor deposits a total of Rs 22.5 lakh.

Maturity amount:

After 15 years, the maturity corpus is approximately Rs 40.68 lakh.

Interest earned:

Around Rs 18.18 lakh is earned as interest over the tenure.

Tax benefits (triple exemption):

Investment qualifies for deduction under Section 80C of the Income Tax Act.

Interest earned is completely tax-free.

Maturity amount is also fully exempt from tax.

(This is known as EEE – Exempt, Exempt, Exempt status.)

Minimum investment:

Start with as low as Rs 500/year. No minimum monthly requirement.

Security:

The scheme is backed by the Government of India, offering sovereign guarantee.

Ideal for risk-averse investors looking for safe and steady returns.

Best use cases:

Suitable for long-term goals like:

Retirement planning

Children’s education

Building a tax-free corpus over time