Mukhya Mantri Ladli Behna Yojana: How does compounding turn a small monthly investment into a decent corpus?
Are you familiar with the “Mukhya Mantri Ladli Behna Yojana" initiated by the Madhya Pradesh government in January 2023? This program aims to provide financial empowerment to underprivileged girls and women in the state, offering a monthly grant of ₹1000. This translates to an annual sum of ₹12,000 deposited into the bank accounts of eligible women aged 23-60 years old.
While some might perceive the amount as modest, have you considered the potential impact of systematic and regular investments? These small earnings, when invested consistently, have the capacity to help women amass a substantial corpus for their future.
Assume that someone opts for a straightforward investment avenue such as the Public Provident Fund (PPF), catering to investors with a low-risk tolerance who are satisfied with consistent, fixed returns. The PPF scheme has a maturity period of 15 years. However, even after this 15-year duration, numerous benefits continue to be accessible.
The following illustration explains how much a woman aged 23 years old will gain if she invests the monthly grant without fail in a PPF account for 15 years.
Monthly Investment: ₹1000
Interest Rate: 7.1%
Investment Tenure: 15 years
The investment would translate to
Total Invested Amount: ₹1.8 lakh
Interest Earned: ₹1.36 lakh
Maturity Amount: ₹3.16 lakhs
Assume that the aforementioned investor does not redeem the amount after 15 years but decides to continue with her investment for another 15 years.
The investment would translate to
Total Invested Amount: ₹3.6 lakhs
Interest Earned: ₹8.39 lakhs
Maturity Amount: ₹11.99 lakhs
This sum proves to be significant, especially when considering how financially disadvantaged women reliant on government assistance can turn to
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