The Hidden Formula of PPF That Most People Don’t Know

PPF Formula: Did you know that the Public Provident Fund (PPF) has a secret formula known as the 15+5 rule? This strategy can help you secure a monthly income of ₹40,000 if used correctly. In this detailed guide, we will explain how you can maximize your PPF investment and turn it into a safe and tax-free passive income source.

What is the 15+5 Formula in PPF?

PPF is a government-backed investment scheme that comes with tax benefits and risk-free returns. Here’s how the 15+5 strategy works:

• PPF has a maturity period of 15 years.
• After 15 years, you have two options:
  1. Withdraw the full amount and close the account.
  2. Extend the account for 5 years (without making new deposits).
• By extending your account every 5 years, your corpus continues to grow, and you can earn a stable income.

How to Get ₹40,000 Monthly Pension with PPF?

Step 1: Invest ₹1.5 Lakh Annually

• To maximize PPF returns, invest ₹1.5 lakh per year (₹12,500 per month) for 15 years.
• This will amount to a total investment of ₹22.5 lakh over 15 years.

Step 2: Extend PPF for 5 More Years

• After 15 years, extend your PPF account for another 5 years.
• No additional investment is required, but your money will continue to earn tax-free interest.
• Due to the power of compounding, your total corpus will reach close to ₹1 crore after 20 years.

Step 3: Withdraw ₹40,000 Per Month

• With an average interest rate of 7% per annum, your corpus will generate an annual interest of around ₹7 lakh.
• You can withdraw ₹40,000 per month while keeping your principal amount intact.

Benefits of PPF Investment

1. Risk-Free & Secure – Backed by the Government of India.
2. Tax-Free Returns – Interest earned is completely tax-free under Section 80C.
3. Emergency Fund Option – Partial withdrawals are allowed after 15 years.
4. Flexible Extension – You can extend PPF in 5-year blocks without fresh deposits.
5. Long-Term Wealth Creation – Compounding interest helps in building a retirement corpus.

How to Open a PPF Account?

You can open a PPF account at any bank or post office by following these steps:

1. Visit your nearest bank/post office.
2. Fill out the PPF account opening form.
3. Submit necessary documents:
   • Aadhaar Card
   • PAN Card
   • Recent Passport-size Photograph
4. Deposit a minimum of ₹500 to activate the account.
5. Link your account with net banking for online transactions.

Final Thoughts

If you plan wisely, PPF can be your ticket to a secure retirement with a monthly pension of ₹40,000. The 15+5 formula is a game-changer, helping you grow your money without any risk. Start your PPF investment today and ensure a financially stable future!

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