Before we deep dive into the analysis, it suffices to say that PPF is one of the best fixed income investment choices under Section 80C. The tax treatment of PPF makes the returns more attractive relative to other fixed income investments under Section 80C (like NSC, PO time deposits, tax saving fixed deposits). Even when compared to historical returns of traditional life insurance policies, PPF returns are higher. The chart below shows the PPF returns since FY 2000 – 2001.
Let us now see how much maturity amount one would have accumulated in the last 15 years by investing upto the maximum 80C investment limit in PPF. The chart below shows the cumulative deposit amount and value of the investment in PPF.
The blue line shows the cumulative deposits made by the investor in his or her PPF account every year. The total deposit made by the investor is र 15,20,000 (र 15.2 lacs) over the duration of the PPF. The red line shows the value of the PPF account, inclusive of accrued interest. The maturity amount of the investor is about र 29,82,000 (around र 29.8 lacs).