PPF Scheme: How Post Office Savings Can Help You Build a ₹15 Lakh Fund for Your Child’s Future

Kokila Chokkanathan
Rising education costs can put a significant burden on parents. However, the Post office Public Provident Fund (PPF) Scheme offers a reliable and secure way to build a large corpus over time. Here’s why this scheme is one of the best options for middle-class families and how small savings can lead to a big fund.


1. What is the PPF Scheme?

The Public Provident Fund (PPF) is a government-backed small savings scheme offered by the Post Office. It is designed for long-term investment and is known for:

  • Guaranteed returns
  • Tax-free interest
  • Safety due to government security

2. Investment Range and Tenure

  • Minimum Investment: ₹500 per year
  • Maximum Investment: ₹1.5 lakh per year
  • Maturity Period: 15 years (can be extended in blocks of 5 years thereafter)
This flexible range allows even small investors to start saving.


3. Interest Rate

  • Current interest rate: 7.1% per annum (compounded annually)
  • The interest earned is completely tax-free, increasing overall returns.

4. How to Build a ₹15 Lakh Fund?

By making consistent annual investments of ₹1.5 lakh, the maximum allowed, for 15 years at 7.1% interest, parents can accumulate nearly ₹15 lakh on maturity.

  • Principal Investment: ₹22.5 lakh (over 15 years)
  • Total Corpus (with interest): approx. ₹40.7 lakh
Even with smaller contributions, a sizable amount can be built.


5. Small Daily Savings Can Lead to Big Returns

  • Saving just ₹70 per day = ₹2,100 per month = ₹25,200 per year
  • After 15 years, with 7.1% annual interest, you can accumulate approx. ₹6.78 lakh
  • A substantial amount for college fees, competitive exams, or higher education.

6. Key Benefits of PPF

  • Safe & Secure: Backed by the government of India
  • Fixed Returns: Not affected by market fluctuations
  • Tax-Free: Both interest earned and maturity amount are exempt from income tax
  • Loan & Withdrawal Options: Partial withdrawals are allowed after 7 years, and loans can be taken against the balance.

7. Why PPF is Ideal for Children's Future

  • Ensures a disciplined savings habit
  • Creates a lump sum amount at the right time – when children reach college or higher education
  • Provides tax savings under Section 80C

8. How to Open a PPF Account

  • Visit any Post office or authorized bank branch
  • Provide KYC documents, address proof, and photographs
  • Start with a deposit of ₹500 or more


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