PPF 1 crore formula How to create a fund of ₹1 crore using the smart 15 + 5 + 5 strategy with PPF

PPF Tips: Create a fund of ₹1 crore through PPF using the formula 15 + 5 + 5

When it comes to safe and secure investment options in India, the Public Provident Fund (PPF) is one of the most reliable schemes. Supported by the Government of India, PPF not only provides assured returns but also offers tax benefits under Section 80C.

Many investors view PPF merely as a small savings instrument, but with the right strategy and patience, it can help you build a substantial corpus—even as large as ₹1 crore. Long term investment in PPF

In this article, we will explain how you can use the “15 + 5 + 5 formula” to turn your disciplined savings into a retirement fund of ₹1 crore. Let’s break it down step by step.

 

What is PPF and Why Should You Consider It?

The Public Provident Fund (PPF) is a long-term saving and investment scheme introduced by the Government of India in 1968. Its purpose is to encourage individuals to save for their future, which also includes the additional benefit of tax-free returns.

Key features of PPF:

• Tenure: 15 years (extendable in blocks of 5 years)
• Minimum investment: ₹500 per year
• Maximum investment: ₹1.5 lakh per year
• Interest rate: Decided quarterly by the government (currently around 7.1% per annum)
• Tax benefits: EEE (Exempt-Exempt-Exempt) status — investment, interest earned, and maturity amount are all tax-free

Because of its government backing and guaranteed returns, PPF is considered one of the safest long-term wealth-creation tools.

 

The 15 + 5 + 5 Formula Explained

Most people open a PPF account and close it after 15 years, withdrawing the money immediately. While this gives a decent lump sum, it’s not enough to reach ₹1 crore.

The smart approach is to extend the account in blocks of 5 years. That’s where the 15 + 5 + 5 formula comes in:

1. Invest consistently for 15 years → Don’t withdraw the maturity amount.
2. Extend your account for 5 years (first extension) → Continue investing.
3. Extend again for another 5 years (second extension) → Stay invested for the long term.

By following this formula, you allow your savings to compound powerfully over 25 years. This disciplined approach is what helps your PPF corpus grow to ₹1 crore. Safe investment options in India

 

How Much Should You Invest to Reach ₹1 Crore?

Let’s look at some numbers to understand how the formula works.

Case 1: Maximum Investment (₹1.5 lakh per year)

• Investment period: 25 years (15 + 5 + 5)
• Annual investment: ₹1.5 lakh
• Interest rate: 7.1% (approx.)
• Maturity corpus: Around ₹1.03 crore

This shows that if you keep investing the maximum permissible amount every year and extend your account, you can comfortably cross ₹1 crore.

Case 2: Smaller Investment (₹1 lakh per year)

• Investment period: 25 years
• Annual investment: ₹1 lakh
• Corpus at maturity: Around ₹69–72 lakh

Even if you don’t invest the full ₹1.5 lakh, PPF still gives you a very respectable amount.

Case 3: Moderate Investment (₹50,000 per year)

• Investment period: 25 years
• Annual investment: ₹50,000
• Corpus at maturity: Around ₹34–36 lakh

This shows the power of compounding—the longer you stay invested, the bigger your corpus becomes.

 

Why the 15 + 5 + 5 Formula Works So Well

The formula works because of compounding interest. In PPF, interest is calculated yearly and added back to your balance. The longer you stay invested, the more your balance earns interest, creating an exponential growth effect.

For example:

• After 15 years of investing ₹1.5 lakh annually, your balance may be around ₹40–45 lakh.
• If you extend it for 5 more years, it may grow to ₹65–70 lakh.
• With another 5 years, it finally crosses ₹1 crore.

This extra 10 years of compounding makes all the difference.

 

Tips to Maximize Your PPF Returns

If your goal is to reach ₹1 crore, here are some practical tips:

1. Invest at the Start of the Financial Year

The earlier you invest in a year (preferably in April), the more interest you earn for that year. Lump-sum investment at the beginning of the year beats monthly contributions in terms of returns.

2. Always Invest the Maximum (₹1.5 lakh/year)

If you can afford it, invest the full amount every year. This ensures you reach the ₹1 crore milestone without stress.

3. Never Break the Chain

Don’t withdraw prematurely, even if allowed. Every partial withdrawal reduces the compounding effect.

4. Use the Extension Feature

After 15 years, don’t close your account. Always extend it in blocks of 5 years. This is the secret behind the 15 + 5 + 5 formula.

5. Think Long-Term

PPF is not meant for short-term goals. Treat it as your retirement or child’s education fund and allow it to grow silently in the background.

 

PPF vs Other Investment Options How to reach ₹1 crore with PPF

You may wonder why you should stick with PPF for 25 years when there are other investment options available. Let’s compare:

PPF vs Fixed Deposit (FD)

• FD interest: 6–7% (taxable)
• PPF interest: 7.1% (tax-free)
• Winner: PPF (better returns + tax-free maturity)

PPF vs Mutual Funds (Equity)

• Mutual funds: Can give 12–15% but are market-linked and risky
• PPF: Safe and guaranteed returns
• Winner: Depends on your risk appetite. Conservative investors prefer PPF, while aggressive investors may combine both.

PPF vs NPS (National Pension System)

• NPS: Market-linked, but offers additional tax benefits
• PPF: Safer but lower returns
• Winner: For retirement, a mix of PPF and NPS works best.

 

Example Calculation: Step-by-Step Growth

Let’s assume you invest ₹1.5 lakh every year in PPF. Here’s how your money grows:

• After 5 years: ~₹8.6 lakh
• After 10 years: ~₹20.7 lakh
• After 15 years: ~₹40–45 lakh
• After 20 years: ~₹65–70 lakh
• After 25 years: ~₹1.02–1.05 crore

This simple example shows the real magic happens in the last 10 years.

 

Benefits of Reaching ₹1 Crore with PPF

1. Tax-Free Wealth – Unlike other investments, your entire ₹1 crore is tax-free.
2. Retirement Security – It can serve as a pension fund.
3. Safe Investment – Government-backed, zero risk of default.
4. Compounding Advantage – Teaches you discipline and patience.
5. Flexible Extensions – Option to extend further even beyond 25 years.

 

Common Mistakes to Avoid

• Withdrawing too early – This kills the compounding power.
• Not investing full amount – If possible, always invest the maximum.
• Delaying yearly deposit – Late deposits reduce your yearly interest.
• Closing account at 15 years – Big mistake if you want ₹1 crore.

 

SEO-Friendly FAQs 15 + 5 + 5 PPF investment plan

Q1. Can PPF really give ₹1 crore?

Yes, if you invest ₹1.5 lakh every year for 25 years using the 15 + 5 + 5 formula, your PPF account can grow to ₹1 crore.

Q2. What is the maximum duration of a PPF account?

Initially, 15 years. After that, you can extend it in blocks of 5 years indefinitely.

Q3. Is PPF better than mutual funds for wealth creation?

PPF is safer and guaranteed, while mutual funds may offer higher returns but with risks. Conservative investors prefer PPF for stable, long-term growth.

Q4. How much should I invest monthly in PPF to reach ₹1 crore?

If you invest the maximum ₹1.5 lakh annually (around ₹12,500 monthly), you can reach ₹1 crore in 25 years.

Q5. Is the PPF maturity amount taxable?

No, PPF follows the EEE model. The maturity amount, including interest, is completely tax-free.

Q6. Can I extend PPF after 15 years without depositing money?

Yes, you can extend with or without fresh contributions. But if your goal is ₹1 crore, continue depositing.

 

Conclusion PPF 1 crore formula

The Public Provident Fund (PPF) is one of the safest and most reliable ways to build long-term assets. By following the 15 + 5 + 5 formula and investing ₹1.5 lakh every year, you can create a tax-free fund of ₹1 crore in 25 years.

 The key is discipline, patience, and consistency. Start early, invest regularly, avoid early withdrawals, and let compounding work its magic. If you want a sure and stress-free way to secure your future, then PPF should definitely be a part of your financial plan.