The Post Office Public Provident Fund (PPF) Scheme is one of the safest and most reliable long-term investment options in India. Whether you’re a beginner investor, a salaried professional, or a parent planning your child’s future, understanding how much you will earn by depositing amounts like ₹500, ₹1,000, ₹3,000, or ₹6,000 yearly can help you make smarter financial decisions.
In this article, we’ll break down how much you can earn by investing small to moderate amounts in the PPF scheme. We’ll also guide you through how the scheme works, key benefits, and how professionals and general investors alike can leverage it.
Post Office PPF Scheme
| Feature | Details |
|---|---|
| Scheme Name | Public Provident Fund (PPF) |
| Minimum Deposit Amount | ₹500 per year |
| Maximum Deposit Amount | ₹1.5 lakh per year |
| Current Interest Rate (FY 2024-25) | 7.1% per annum (compounded annually) |
| Maturity Period | 15 years (extendable in 5-year blocks) |
| Tax Benefits | EEE (Exempt-Exempt-Exempt) – Tax-free under Section 80C & at maturity |
| Official Website | India Post PPF Scheme |
| Ideal For | Salaried individuals, self-employed, long-term planners, parents saving for child’s education/marriage |
| Guaranteed Returns? | Yes, backed by the Government of India |
| Professional Advantage | Helps professionals with safe, tax-saving, retirement-friendly investment options with compounding benefit |
Whether you’re investing ₹500 or ₹6,000 annually, the Post Office PPF Scheme is a time-tested, safe, and rewarding option. It’s perfect for those who prefer guaranteed returns, tax benefits, and long-term financial growth without market risks. By understanding how compounding works and planning your deposits wisely, you can make the most out of even small contributions.
What is the Post Office PPF Scheme?
The Public Provident Fund (PPF) Scheme is a government-backed savings scheme introduced in 1968. It is designed to encourage long-term savings and offers a combination of safety, attractive returns, and tax benefits. The returns are fixed by the Ministry of Finance quarterly, and the current interest rate (FY 2024-25) stands at 7.1% per annum.
The best part? It’s one of the few schemes in India that follows the EEE (Exempt-Exempt-Exempt) tax benefit rule—meaning your contributions, interest earned, and maturity amount are all tax-free!
see also: You Can Get a Return of ₹2 Lakh on Depositing ₹2,800
How Much Will You Get by Depositing ₹500 to ₹6,000 Annually?
Let’s take a closer look at how small, consistent annual deposits can grow over the standard 15-year tenure.
| Annual Deposit (₹) | Total Deposits Over 15 Years (₹) | Total Interest Earned (₹) | Maturity Amount (₹) |
|---|---|---|---|
| ₹500 | ₹7,500 | ₹6,064 | ₹13,564 |
| ₹1,000 | ₹15,000 | ₹12,128 | ₹27,128 |
| ₹2,000 | ₹30,000 | ₹24,257 | ₹54,257 |
| ₹3,000 | ₹45,000 | ₹36,385 | ₹81,385 |
| ₹4,000 | ₹60,000 | ₹48,514 | ₹1,08,514 |
| ₹5,000 | ₹75,000 | ₹60,642 | ₹1,35,642 |
| ₹6,000 | ₹90,000 | ₹72,771 | ₹1,62,771 |
Note: Interest calculated at 7.1% p.a., assuming the deposit is made at the beginning of each financial year.
Why Professionals & General Investors Choose PPF
1. Safe & Government-Backed
Unlike stocks or mutual funds, PPF offers guaranteed returns as it is backed by the Government of India.
2. Tax Savings
Under Section 80C, you can claim up to ₹1.5 lakh deduction on PPF deposits annually.
3. Compounded Interest
Your money grows faster due to annual compounding. Even small deposits like ₹500 a year can result in significant gains over 15 years.
4. Long-Term Wealth Creation
It’s ideal for retirement planning, children’s education, or marriage, as the lock-in period encourages discipline.
Detailed Guide: How to Open a Post Office PPF Account
Step 1: Visit the Nearest Post Office
Carry Aadhaar, PAN card, passport-sized photos, and address proof.
Step 2: Fill Out PPF Account Opening Form
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You can also download the form from the official India Post website: India Post PPF Form
Step 3: Deposit Initial Amount
Deposit a minimum of ₹500, and you can go up to ₹1.5 lakh annually. Payment modes include cash, cheque, or online transfer (in linked banks).
Step 4: Start Earning Interest
Interest is calculated monthly but credited yearly, compounding annually.
How Interest is Calculated in PPF
PPF interest is calculated based on the lowest balance between the 5th and the last day of each month. So, if you’re planning monthly contributions, depositing before the 5th of every month maximizes your returns.
Example:
If you deposit ₹6,000 annually (₹500 monthly), doing it before the 5th can help you earn more compared to depositing later.
Professional Tips for Maximizing PPF Returns
- Deposit Lump Sum at Beginning of FY:
Instead of monthly deposits, if you deposit ₹60,000 at once in April, you’ll earn interest for the entire year on the whole amount. - Auto-Debit from Salary Account:
Professionals can automate payments to ensure discipline and consistency. - Extend After Maturity:
After 15 years, extend in 5-year blocks with or without contribution, and the compounding magic continues. - Joint Financial Planning:
Open PPF accounts for spouse and children separately to maximize tax savings and returns.
see also: How Much Interest Will You Get on ₹1,00,000? Correct Way to Withdraw Bank Interest
Post Office PPF Scheme FAQs
1. Can I deposit more than ₹6,000 in PPF?
Yes, the maximum allowed is ₹1.5 lakh per financial year.
2. Can I withdraw money before 15 years?
Partial withdrawals are allowed after the 7th year, but full maturity happens after 15 years.
3. Is PPF better than Fixed Deposits?
For long-term, tax-saving, and safe investments, PPF generally provides better post-tax returns due to its EEE benefit.
4. Can NRIs open a PPF account?
No, NRIs are not eligible to open new PPF accounts. However, existing accounts can be continued till maturity.
5. Where can I check my PPF balance online?
If you’ve opened your PPF account via a bank linked to net banking, you can view your balance online. Post Office PPF accounts currently require visiting the branch for passbook updates.
