Invest ₹40,000 in Post Office PPF for Your Child & Get ₹10.84 Lakh Maturity – Full Calculation Inside

Every parent dreams of securing their child’s financial future—whether it’s for higher education, marriage, or providing a safety cushion for life ahead. But with rising education costs and increasing uncertainties, choosing the right investment plan becomes a big decision.

Among the safest and most reliable savings options in India, the Post Office Public Provident Fund (PPF) Scheme stands out. It is a government-backed scheme that not only provides guaranteed returns but also comes with attractive tax benefits.

In this article, we’ll break down the full calculation of how depositing ₹40,000 per year in PPF can grow into ₹10,84,856 at maturity, why it is considered one of the best investment tools for children, and how you can start.

What is the Post Office PPF Scheme?

The Public Provident Fund (PPF) is a long-term savings scheme introduced by the Government of India. It is available through both post offices & selected banks. The scheme is designed to encourage small savings with guaranteed returns and tax benefits under Section 80C.

Key Features:

• Tenure: 15 years (extendable in blocks of 5 years)
• Minimum Investment: ₹500 per year
• Maximum Investment: ₹1.5 lakh per year
• Interest Rate: Around 7.1% (quarterly revised by the government)
• Tax Benefit: Deduction under Section 80C, and maturity proceeds are completely tax-free (EEE – Exempt, Exempt, Exempt).

Why PPF is the Best Investment for Children

When planning for children, parents prefer safe & stable returns over risky market-linked products. PPF fits this requirement perfectly.

• Government-backed security ensures no risk of capital loss.
• Tax-free returns mean more money stays in your hand.
• Helps in building a disciplined saving habit for long-term goals."
• Can be opened in a child’s name by parents/guardians, making it a perfect start for their financial journey.
• Funds can be used for higher education or marriage expenses once the child turns 18.

Also Read: PPF & Income Tax: The Section That Turns Your Savings Into Tax-Free Wealth

Full Calculation: Deposit ₹40,000 Every Year → Get ₹10,84,856 at Maturity

Let’s break down how the PPF calculation works:

• Yearly Deposit: ₹40,000
• Tenure: 15 years
• Interest Rate: 7.1% (compounded annually)
• Total Deposit (Principal): ₹6,00,000 (₹40,000 × 15 years)
• Total Interest Earned: ₹4,84,856
• Maturity Value after 15 years: ₹10,84,856

This calculation assumes that the contribution is made at the beginning of each financial year to maximize interest. The power of compounding works best in PPF since the longer you stay invested, the higher the returns.

Year-Wise Illustration of Growth

Here’s a simplified table of how your money grows in PPF:

(Values are approximate, based on 7.1% interest rate)

Tax Benefits of PPF

The Post Office PPF Scheme is one of the few investments that fall under the EEE (Exempt-Exempt-Exempt) category:

1. Exempt at Investment – You can claim up to ₹1.5 lakh deduction annually under Section 80C.
2. Exempt at Interest – The yearly interest earned is tax-free.
3. Exempt at Maturity – The final amount you receive is 100% tax-free.

This makes PPF one of the most tax-efficient investment options in India.

Rules for Withdrawal and Loan Against PPF

While PPF is a long-term scheme, it also provides flexibility in emergencies:

• Partial Withdrawals: Allowed after the 7th year for specific needs like education or medical expenses.
• Loan Against PPF: Available from the 3rd year to the 6th year, up to 25% of the balance.
• Full Withdrawal: Only after 15 years of maturity (can be extended in blocks of 5 years).

This ensures that funds remain secure but still accessible during urgent requirements.

Also Read: SIP vs PPF: Invest ₹1000 Monthly for 10 Years – Who Wins the Crorepati Race?

Why Parents Prefer Post Office PPF Scheme for Children

1. Low Risk, High Security – No link to stock markets.
2. Small Investments, Big Returns – Even ₹40,000 per year grows into over ₹10 lakh.
3. Tax-Free Growth – No burden of income tax on maturity."
4. Nationwide Access – Easy to open & manage at post offices or banks.
5. Legacy Planning – Account can be continued for future generations.

PPF vs Other Child Investment Options

Many parents compare PPF with Sukanya Samriddhi Yojana (SSY), Fixed Deposits, and Mutual Funds.

• Sukanya Samriddhi – Higher interest (around 8%) but only for girl children.
• FDs – Taxable & lower interest compared to PPF.
• Mutual Funds (SIP) – Potentially higher returns but carry market risks.

For safe and predictable returns, PPF remains unmatched.

How to Open a PPF Account in Post Office

1. Visit your nearest Post Office branch.
2. Fill the PPF Account Opening Form (Form A).
3. Submit required documents:
   • Aadhaar card
   • PAN card
   • Photograph
   • Initial deposit (minimum ₹500)
4. Account is opened instantly, & you can start depositing via cash, cheque, or online transfer (if facility available).

Expert Insights – Why Start Early?

Financial planners always recommend starting PPF investments early. If you begin saving for your child when they are very young, by the time they turn 18 or 21, you will have a significant tax-free corpus ready.

For example, if instead of ₹40,000, you deposit ₹1.5 lakh annually, your corpus can grow to ₹40 lakh in 15 years.

Things to Remember Before Investing in PPF

• Investment is locked for 15 years – ideal for long-term goals.
• Interest rate is revised every quarter by the government.
• You can invest lump sum or monthly, but yearly maximum is ₹1.5 lakh.
• Only one PPF account per person is allowed.

Also Read: Tax-Free Benefits from Provident Funds and Sukanya Samriddhi Account

Conclusion

The Post Office PPF Scheme is a safe, tax-saving, and guaranteed-return investment option for children’s future. By depositing just ₹40,000 per year, parents can build a maturity corpus of ₹10,84,856, ensuring their child’s higher education or marriage expenses are well-supported.

In times of rising costs & uncertain markets, PPF stands as a trustworthy financial planning tool every parent should consider.