The Public Provident Fund (PPF) is one of the safest and most favored long-term investment avenues in India, providing returns with a guarantee along with tax benefits. The State Bank of India offers PPF accounts with attractive interest rates. Thus, it has become a favored option for investors who want to create secure wealth. Lump sum deposits of ₹35,000 will help in having a large corpus after a given period. Let’s note how this is done.
What is the SBI PPF Scheme?
The SBI PPF scheme is a government-backed saving scheme that allows investors to place money for the long term with assured returns. It has a 15-year maturity period and is extendable in blocks of 5 years after maturity. Interest rates under the scheme are compounded annually, while under the Income Tax Act, benefits are available under Section 80C, making it a safe plus tax-efficient means for investment.
Growth of the Investment
A ₹35,000 contribution to a PPF account is a disciplined manner of saving for one’s long-term financial goals. Since interest is compounded annually, deposits can be made either in one lump sum or as installments down monthly installments.
Given the current PPF interest rate of 7.1 percent per annum, your investment grows day by day till the 15-year period expires, helping you collect a corpus of approximately ₹4.24 lakh at maturity.
Example Calculation
Let us see how the amount of ₹35,000 grows with time yearly in the SBI PPF scheme:
| Year | Annual Contribution (₹) | Total Contribution (₹) | Accumulated Interest (₹) | Approx. Balance (₹) |
|---|---|---|---|---|
| 1 | 35,000 | 35,000 | 2,485 | 37,485 |
| 5 | 35,000 | 1,75,000 | 25,875 | 2,00,875 |
| 10 | 35,000 | 3,50,000 | 70,000 | 4,20,000 |
| 15 | 35,000 | 5,25,000 | 99,000 | 4,24,000 |
This calculation over time demonstration proves the magic of compounding. Through this explanation, you behold how ₹35,000 gradually transforms into a large corpus through disciplined investing over a period of 15 years.
Benefits of SBI PPF Scheme
Some advantages are offered by the SBI PPF scheme. It gives guaranteed returns, so it is basically a low-risk investment. It additionally goes with tax savings under Section 80C, whereby the investor can lower another income. Moreover, this scheme inculcates a practice of saving money and is good for long-term goals like children’s education, retirement planning, or financial security.
Conclusion
Money converted to and invested in the SBI PPF scheme is a sure-fire way to build wealth safely and put to good use. During the ripe period, the accumulation would be ₹4.24 lakh, providing moderate security and fair returns. If started sooner and contributed regularly, an investor can use compounding for a period to nurture massive gains.