i am 30 yrs old. I am planning to invest 70k in PPF every year and after 25 years it will come around 50 Lakhs. I want to know if there will be any value for 50 lakhs 25 years down the line. Other than tax benefit does PPF really gives us social security with such money after a very long time. %0 lakhs looks a big amount now, but after 25yrs, i am just confused. WIll it have a value.

Kindly place ur advice and suggestions. Does Public provident fund(PPF) make a good investment decision or is it just a tax saver with no useful value money when u get it back after 25yrs.

well i think u will be a millionaire

Some considerations for investment- Safety, Liquidity and Returns

Also, Invest Early, Invest regularly and Invest long term.

You have two basic avenues of investment – Debt and Equity

Debt instruments are a Loan you Give ( to the government through banks, PPF, post office or to a private company through a debenture, loan, fixed deposit)

Equity is something you own ( equity share or shares in layman language)

Ideally you must invest 80 minus your age %age in equity shares- but in indian context we take 100- age as we are more conservative and have a smaller Risk appetite

Therefore, you must invest at least 70% of your savings into equity shares with a long term horizon. The share market should give you around 15-20% returns in the long term i.e. 20 years or more.( based on past history of 30 years of the SENSEX – the sensitivity index)

To avoid bad timing, you should invest regularly – maybe through a SIP-systematic investment planning(mutual fund) or buy shares regulary to average out your costs.

Coming to the question at hand, the value of 70K invested for 25 years will depend on how much inflation eats into it. Which means that if the rate of return is 10 % but the rate of inflation is 5% then the real rate of return is only 5 %.

Something that costed Rs. 100 now costs Rs. 105, and your money grew from 100 to 110- so in real terms your money actually grew only by 5 %

Hope this is sufficiently confusing..

1 to 1.25 lakh Rupees per month will be your expenses for a family of two (average standard) with out any committment left, after 25 years if the present rate of inflation continues.