Planning for your child’s future is one of the most important financial responsibilities you can take on as a parent. From education to marriage, every milestone brings with it significant expenses.
Thankfully, with long-term, disciplined investing, even modest annual contributions can lead to a sizable corpus. One such time-tested and safe investment avenue is the Public Provident Fund (PPF). In this blog post, we’ll explore how you can build a corpus of ₹24.40 lakh by investing just ₹90,000 per year in a PPF account.
What Is PPF and Why It’s Ideal for Long-Term Goals
The Public Provident Fund is a government-backed, long-term savings scheme designed to encourage small savings while providing tax benefits. Introduced in 1968, it continues to be a preferred choice for conservative investors due to its safety, tax-free returns, and decent interest rates. PPF accounts have a lock-in period of 15 years, making them particularly suited for long-term goals such as a child’s higher education or marriage.
One of the strongest reasons for choosing PPF for a child’s future is the power of compounding over a 15-year horizon. Since the interest earned and the maturity amount are both tax-free under Section 80C of the Income Tax Act, it makes for an extremely efficient savings vehicle.
How ₹90,000 Per Year Grows into ₹24.40 Lakh in 15 Years
Let’s take a look at the numbers. If you invest ₹90,000 every year into a PPF account, and assume an average interest rate of 7.1% per annum (the current PPF rate as of 2025), you can build a corpus of approximately ₹24.40 lakh over 15 years.
Here’s how it works. The ₹90,000 investment can be done either in one lump sum at the beginning of each financial year or in monthly instalments. The interest is compounded annually and credited at the end of the financial year. The earlier you invest in the year, the more interest you earn. Therefore, investing in April rather than March gives you an extra year of compounding for each contribution.
Over 15 years, the total principal invested would be ₹13.5 lakh (₹90,000 x 15). The rest — around ₹10.9 lakh — comes purely from compounding interest. That’s the magic of staying invested and letting your money grow quietly and safely.
Ideal Age to Start Investing for Your Child
To maximise the benefits of this plan, the best time to start is as early as possible in your child’s life. Ideally, within the first year of birth. This ensures that the PPF matures around the time your child turns 15 or 16, which aligns closely with key financial needs such as funding higher education or career development programs.
Opening a PPF account in the name of a minor is allowed, with the parent or guardian operating the account until the child becomes a major. The combined contribution limit in PPF for a parent and minor child is ₹1.5 lakh per year, so your ₹90,000 investment comfortably fits within the legal limit.
Tax Benefits Enhance Overall Returns
One of the strongest features of PPF is its EEE (Exempt-Exempt-Exempt) tax status. The contributions made qualify for deduction under Section 80C (up to ₹1.5 lakh per year), the interest earned is tax-free, and the maturity amount is also tax-free. This makes PPF one of the most tax-efficient instruments available in India today.
Compare this to other investment vehicles where either the interest is taxed, or capital gains apply. With PPF, your real returns stay intact, and the power of compounding works uninterrupted over the full 15-year period.
Flexibility and Liquidity Options Along the Way
Although the full maturity period of a PPF account is 15 years, it does offer some flexibility. From the 7th year onward, partial withdrawals are allowed, subject to certain conditions. This can be useful in case of an unexpected need or emergency. However, for the purpose of building a full corpus for your child, it is recommended not to touch the funds until the end of the term.
You can also take a loan against your PPF balance from the 3rd financial year up to the 6th year. While this may not be necessary if you are financially stable, it’s good to know that the account offers liquidity if needed.
What Happens After 15 Years?
At the end of 15 years, the PPF account matures and the entire amount — principal plus interest — is paid to the account holder. You can use this amount for your child’s college admission, foreign studies, or even as seed capital for their business dreams.
If you don’t need the funds immediately, you can extend the PPF account in blocks of 5 years, with or without making further contributions. This flexibility gives you more control over your long-term financial planning.
Why PPF Beats Most Other Safe Investments
While other safe instruments like fixed deposits, NSC, or recurring deposits offer security, they do not match the tax-free return advantage of PPF. Most of them are also taxable at maturity, which reduces your real post-tax returns.
PPF offers a balanced combination of capital protection, tax benefits, and compounding growth. For someone who wants to avoid equity market volatility but still wishes to build a sizable fund over time, PPF stands out as a reliable choice.
Building the Habit of Consistent Saving
One of the underrated benefits of a PPF-based plan is that it instills a habit of disciplined saving. When you commit to putting away ₹90,000 every year — just ₹7,500 a month — you slowly build a strong savings foundation. Over time, you’ll see the satisfying results of consistent effort, without the anxiety of daily market fluctuations.
You don’t need to be a financial expert to follow this plan. Just one simple, regular action repeated over 15 years can build a future-proof corpus for your child. It’s that simple.
Final Thoughts
Creating a ₹24.40 lakh corpus for your child may sound ambitious, but with a clear plan and steady discipline, it is completely achievable. The Public Provident Fund remains one of India’s most trusted and tax-efficient ways to build wealth safely over the long term. If you begin early and stay consistent, this single decision could provide a strong financial cushion for your child’s dreams, helping them take off with confidence and without debt.
Disclaimer: This article is for informational purposes only and should not be considered financial advice. Please consult a certified financial advisor before making any investment decisions.