In case you don’t have a PPF account, you should get one. Why? Because you can turn small amounts of money and turn them into massive sums courtesy of the high PPF interest rate. Here we show you how Rs 7000 can turn into Rs 57,72,485.

A high PPF interest rate of 7.1% can turn your Rs 7000 monthly into a huge corpus of Rs 57,72,485. Know what PPF calculator shows. (Getty)

If you are around 25 years old and still have no Public Provident Fund account of your own, then here is a big reason to get up and walk to the nearest bank and start one today. Any person who is working today may find himself jobless a few years down the line. If you run out of money, what will happen to you and your family? What you need is a a steady source of wealth accumulation to support you during an emergency like an unemployment period or after you want to retire. And remember, you have to do absolutely nothing more than turn up at the bank, month after month to invest your 7000 rupees in your PPF account.

Once you do hat, forget all about it and let the PPF interest rate and the magic of compounding do their jobs. And we will show you the result through this little exercise that may well goad you to buckle up and start your PPF journey. First of all, know the PPF interest rate. The same is 7.1%. As a money-making tool that is enough as it carries no risk at all and you don’t even have to pay any tax on it. Other money schemes may offer a higher interest rate, but they also carry a lot of risk. So, those who do not want to risk their money or otherwise jeopardise it, should consider the PPF interest rate as being quite adequate for their purpose, which is wealth accumulation over a certain period.

So, we already have our Rs 7000 investment and a PPF interest rate of 7.1%. All that is required is the tenure of the PPF account. While PPF initially has a tenure of 15 years, an account holder can extend it by 5 years indefinitely. Let us assume the PPF account was extended twice. That makes the entire tenure 25 years. Therefore, if you are 25-year-old now, at the age of 50, you can derive a huge amount of money from your PPF account.

With all these sums put through the PPF calculator, what you get is a maturity value of Rs 57,72,485. Yes, that is the amount you will get. And what was the interest? Rs 36,72,485. And the total investment by the PPF account holder? Rs 21,00,000!

Clearly, these are big numbers that can lead anyone to buy a big asset for the family like a home, a car or even to put children through college.

Note: These are estimations and the real interest rate and maturity value can be seen in PPF passbook.