Recently, one of my relatives received a huge amount of Rs.15 lakhs with just an investment of Rs.500 per month. I couldn’t stop myself from asking, “How did you receive such a significant return on an investment of Rs.500 per month?” 

They explained that they had invested in various investment plans such as PPF, SSY, SIP, and Post Office RD. Over time, as their investment amount reached on maturity stage, they gained huge interest and accumulated a considerable savings amount. 

With a multitude of Smart Investment Plans available, it’s perplexing to decide on the right one. The future is unpredictable, and while we can’t foresee what will happen, we can invest today to secure our future. 

Maybe, not every investment plan suits your needs, but one of them will surely align with your financial goals.  Below, I’ll explain “How to make more money from 500 rupees?” in detail, so you can also earn good returns by investing as little as Rs. 500 per month.

How to make more money from 500 rupees?

So, let’s start exploring all the smart investment plans that you can consider for your future investments.

#1 Public Provident Funds (PPF)

PPF, or Public Provident Fund, stands as one of the most resilient and secure options for investment. However, it involves a ‘lock-in period,’ meaning you need to invest Rs. 500 every month for upto 15 years. 

Your investment will blossom at maturity which yields you both the seed (your principal amount) and its fruit (the interest). Let’s say, you initiate a PPF account, and every month, Rs. 500 is deducted from your account toward your deposit. Here is a glimpse of this scenario:

Your monthly contribution: Rs. 500

Total calculated yearly contribution: Rs. 500 × 12 = Rs. 6,000

Period: 15 years

Interest rate: 7.1% per annum (compounded annually)

When you calculate it properly, you will find that the maturity amount becomes Rs. 1,54,908 with interest.

Total interest earned: Rs. 1,54,908 – Rs. 90,000 = Rs. 64,908

So basically, you earned Rs. 64,908 as an interest. The best thing about this smart investment plan is its risk-free nature and stable interest rate.

#2 Systematic Investment Plan (SIP)

It refers to the systematic investment plan as it involves investing in stock market and other financial instruments. In this type of investment plan, you need to choose a suitable investment fund for you and can invest quarterly, monthly, or on a lump sum basis. 

The interest rate in SIP depends on the market’s up and down. Let’s say the company you have invested in performs well in the market. This will positively impact your investment, as you will receive good returns at the end of the day.

Now, if you’re wondering how to make more money from 500 rupees? let’s understand this with an example:

Suppose you can save Rs. 500 every month and are considering investing in a SIP to achieve good returns. In that case, SIP is a great option. Now, let’s see how it works.

Your monthly contribution: Rs. 500

Let’s say you invested for 1 year (12 months) at an interest rate of 12%. After 1 year, you would receive:

Maturity amount: Rs. 6720

Total interest earned: Rs. 720

So, you earned Rs. 720 by just doing nothing, Isn’t that amazing? I mean, earning while saving! The interest rate will increase if you increase your savings amount. For example:

Let’s say you invested Rs. 1000 every month for 1 year. At the end of the year, you will receive  Rs. 13,440 as the maturity amount, which includes a total interest earned of Rs. 1440.

#3 Post Office Recurring Deposit (RD)

Did you know that post offices also offer saving schemes with attractive interest rates? Opening a Post Office savings deposit account is a straightforward process, which allows you to fund it via cash or cheque. The Post Office RD (Recurring Deposit) is another trustworthy investment option that offers an affordable way to save your money. 

With just Rs. 100, you can easily open a Post Office RD account and enjoy its lucrative benefits, such as attractive interest rates and secure deposits. Let’s understand this with a simple example.

Minimum investment amount: Rs. 100

Let’s say, you start your investment with Rs. 500 for up to 5 years.

Duration: upto 5 years

Interest rate: 6.5%

Total yearly contribution for 5 years: Rs. 30,000

Total amount after maturity: Rs. 35,287

Total interest earned: Rs. 5,287

#4 Sukanya Samriddhi Yojana (SSY)

Specifically designed for girl children, Sukanya Samriddhi Yojana is one of the most commendable saving schemes. This scheme helps parents save funds for their girl child’s future, such as her education. 

With this scheme, you can open an account with a minimum amount of Rs. 250 for up to 21 years. Let’s understand how you can save a substantial amount by investing in SSY and mitigating all your worries about your child’s education.

Minimum deposit: Rs. 250

Maximum deposit: Rs. 1.5 Lakh

The amount you invested in an SSY account can mature upon the completion of 21 years. Nonetheless, the account can be terminated ahead of schedule once the female beneficiary attains the age of 18 years. Let’s say you start investing Rs.500 per month and set the duration for up to 15 years. Here’s a glimpse:

Your monthly contribution: Rs. 500

Period: 15 years

SSY offers an interest rate of 8.2%.

Your total contribution: Rs. 90,000

Total maturity amount: Rs. 1,53,000 (including interest)

Enrolling in Sukanya Samriddhi Yojana offers you a consistent way of saving even from a small amount of just Rs. 250. Additionally, it is a government-backed investment scheme, so don’t need to worry about its trustworthiness.

Wrapping Up

To sum it up, a modest investment of merely Rs. 500 per month harbors the potential to accumulate substantial wealth over time. The secret is how consistent you are with your monthly contributions. If you find yourself pondering “how to make more money from 500 rupees?” the solution resides in selecting an appropriate investment strategy.

As I discussed various smart investment plans such as PPF, SIP, Post Office RD, and the Sukanya Samriddhi Scheme (SSY), you can choose any of these investment options that align perfectly with your future goal. 

For instance, if you have a limited income source but still want to secure your daughter’s future, you can go with the SSY scheme. On the other hand, if you are in a state to take some risk to grow your investment, SIP is perfect for you.

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