FinanceChk

    PPF Calculator

    Calculate Public Provident Fund returns and tax benefits

    Current PPF Rate

    7.1% p.a.

    Lock-in Period

    15 years

    Tax Benefits

    Section 80C

    PPF Calculator
    Calculate your Public Provident Fund returns and plan for long-term wealth creation

    Minimum: ₹500 | Maximum: ₹1,50,000 per year

    Minimum: 15 years | Can extend in blocks of 5 years

    Current rate: 7.1% | Historical range: 7.1% - 8.1%

    Select your marginal tax rate for accurate tax savings calculation

    What is PPF (Public Provident Fund)?

    Public Provident Fund (PPF) is a long-term tax-saving investment scheme backed by the Government of India. It offers attractive returns with complete tax exemption under the EEE (Exempt-Exempt-Exempt) status, making it one of the best investment options for conservative long-term wealth creation.

    Key Features of PPF

    • • 15-year minimum lock-in period
    • • Tax deduction under Section 80C
    • • Tax-free interest and maturity
    • • Minimum investment: ₹500 per year
    • • Maximum investment: ₹1.5 lakh per year
    • • Government-backed guaranteed returns

    PPF Benefits

    • • Partial withdrawal from 7th year
    • • Loan facility from 3rd to 6th year
    • • Can extend in blocks of 5 years
    • • No TDS deduction
    • • Nomination facility available
    • • Account transferable across India

    PPF Interest Rate History

    PPF interest rates are reviewed quarterly by the Government of India based on 10-year government bond yields. Here's the recent rate history:

    PeriodInterest RateAnnual Return
    Apr 2023 - Mar 20247.1%Current Rate
    Apr 2022 - Mar 20237.1%Stable
    Apr 2021 - Mar 20227.1%Stable
    Apr 2020 - Mar 20217.1%Stable
    Apr 2019 - Mar 20208.0%Higher Rate
    PPF Calculation Formula and Method

    PPF Maturity Calculation Formula:

    PPF uses the Future Value of Annuity formula for calculating maturity amount:

    FV = P × [((1 + r)^n - 1) / r] × (1 + r)

    Where:

    • FV = Future Value (Maturity Amount)

    • P = Annual Investment Amount

    • r = Annual Interest Rate (currently 7.1%)

    • n = Number of Years (minimum 15)

    Step-by-Step PPF Calculation Example

    Let's calculate PPF returns for ₹1,50,000 annual investment for 15 years at 7.1% interest:

    Given: P = ₹1,50,000, r = 7.1%, n = 15 years

    Step 1: Convert rate to decimal: r = 7.1/100 = 0.071

    Step 2: Calculate (1 + r)^n = (1.071)^15 = 2.848

    Step 3: Calculate ((1 + r)^n - 1) / r = (2.848 - 1) / 0.071 = 26.02

    Step 4: Final calculation:

    FV = 1,50,000 × 26.02 × 1.071

    FV = ₹41,79,474 (approx)

    Total Investment: ₹22,50,000 | Total Interest: ₹19,29,474 | Tax Savings: ₹6,75,000 (at 30% tax rate)

    Year-wise PPF Growth Calculation

    Here's how your PPF account grows year by year with ₹1,50,000 annual deposit:

    YearOpening BalanceDepositInterestClosing Balance
    1₹0₹1,50,000₹10,650₹1,60,650
    2₹1,60,650₹1,50,000₹22,056₹3,32,706
    3₹3,32,706₹1,50,000₹34,272₹5,16,978
    5₹8,25,242₹1,50,000₹69,292₹10,44,534
    10₹18,43,665₹1,50,000₹1,41,500₹21,35,165
    15₹37,84,025₹1,50,000₹1,95,449₹41,79,474
    PPF Rules, Withdrawal & Loan Provisions

    PPF Withdrawal Rules

    Partial Withdrawal (7th Year Onwards)

    • • Available from 7th financial year
    • • Maximum 50% of balance at end of 4th preceding year
    • • OR 50% of balance at end of preceding year
    • • Whichever is lower can be withdrawn
    • • Only once per financial year
    • • No interest charged on withdrawal

    Premature Withdrawal (After 5 Years)

    • • Allowed for specific purposes only
    • • Higher education expenses
    • • Critical illness treatment
    • • 1% interest rate reduction
    • • Account closure required

    Complete Withdrawal (After 15 Years)

    • • Full amount available after 15 years
    • • Completely tax-free
    • • Can extend account instead
    • • Extension in blocks of 5 years
    • • Maximum 50 years total tenure

    PPF Loan Facility

    Loan Eligibility

    • • Available from 3rd to 6th year
    • • Maximum 25% of balance
    • • Loan amount up to ₹5,00,000
    • • Interest rate: PPF rate + 1%
    • • Must be repaid within 36 months

    Loan Calculation Example

    Scenario: PPF Balance in 4th year: ₹6,00,000

    • Maximum loan amount: ₹1,50,000 (25% of ₹6,00,000)

    • Interest rate: 8.1% (7.1% + 1%)

    • Repayment period: Up to 36 months

    • Monthly EMI: ₹4,765 (approx)

    Important Loan Rules

    • • Loan must be repaid before maturity
    • • Default affects account standing
    • • Interest compounded monthly
    • • Prepayment allowed without penalty
    • • Only one loan at a time

    PPF Account Management Tips

    Deposit Timing:
    • • Deposit early in financial year for maximum interest
    • • Interest calculated on lowest balance between 5th and last day
    • • Avoid deposits after 5th of any month
    • • Annual deposit can be made in installments
    Account Maintenance:
    • • Minimum ₹500 deposit required annually
    • • Account becomes dormant if no deposit
    • • ₹50 penalty for reactivation
    • • Nomination facility highly recommended
    PPF vs Other Investment Options
    InvestmentReturnsTax BenefitsLock-inRisk LevelLiquidity
    PPF7.1% p.a.EEE Status15 yearsZero RiskLow
    ELSS12-15% p.a.80C + LTCG3 yearsHighHigh
    NSC6.8% p.a.80C Only5 yearsZero RiskNone
    EPF8.25% p.a.EEE StatusTill retirementZero RiskLimited
    FD5-7% p.a.None1-10 yearsZero RiskMedium
    SIP (Equity)12-15% p.a.LTCG BenefitsNoneHighHigh

    Choose PPF If:

    • • You want guaranteed returns
    • • Risk tolerance is very low
    • • Long-term wealth creation goal
    • • Complete tax exemption needed
    • • Government backing important

    Choose ELSS If:

    • • You can handle market volatility
    • • Want higher potential returns
    • • Shorter lock-in preferred
    • • Need some liquidity
    • • Inflation beating returns needed

    Balanced Approach:

    • • 60% PPF for safety and tax benefits
    • • 30% ELSS for growth potential
    • • 10% NSC for medium-term goals
    • • Diversification across risk levels
    • • Optimal tax planning strategy
    Frequently Asked Questions (FAQ)
    What is the minimum and maximum amount I can invest in PPF?

    The minimum investment in PPF is ₹500 per financial year, and the maximum is ₹1,50,000 per financial year. If you don't deposit the minimum amount, your account becomes dormant and attracts a penalty of ₹50 for reactivation. You can make deposits in installments throughout the year, but the total cannot exceed ₹1.5 lakh annually.

    Can I open multiple PPF accounts?

    No, you cannot open multiple PPF accounts in your name. Only one PPF account per individual is allowed. However, you can open a PPF account for your minor child, and your spouse can have a separate PPF account. If you accidentally open a second account, it will be closed and the amount will be transferred to your original account without interest.

    What happens to my PPF account after 15 years?

    After 15 years, you have two options:

    • Complete Withdrawal: Withdraw the entire amount (principal + interest) which is completely tax-free
    • Extend the Account: Extend for another 5 years (can be done multiple times up to 50 years total). You can choose to make fresh deposits or just let the existing amount grow with interest

    If you extend without fresh deposits, you can make partial withdrawals annually. If you extend with fresh deposits, the same withdrawal rules apply as the original 15-year period.

    When is the best time to deposit money in PPF?

    The best time to deposit in PPF is early in the financial year (April-May) and before the 5th of any month. This is because:

    • Interest is calculated on the minimum balance between the 5th and last day of each month
    • If you deposit after the 5th, you lose interest for that entire month
    • Early deposits maximize the compounding effect
    • For maximum benefit, deposit the entire ₹1.5 lakh in April itself

    For example, depositing ₹1.5 lakh in April vs March of the same financial year can give you an extra year's interest on the entire amount.

    Can I transfer my PPF account from one bank to another?

    Yes, you can transfer your PPF account from one bank/post office to another anywhere in India. The process involves:

    • Submit transfer application to the current PPF provider
    • Provide details of the new bank/post office
    • Transfer fee may be charged (usually ₹100-500)
    • Complete process takes 3-4 weeks
    • All benefits and tenure remain unchanged

    The transfer is useful when you relocate or want better service. Ensure the new provider offers PPF services before initiating the transfer.

    What documents are required to open a PPF account?

    To open a PPF account, you need:

    • Identity Proof: Aadhaar card, PAN card, passport, or voter ID
    • Address Proof: Aadhaar card, utility bill, passport, or rental agreement
    • PAN Card: Mandatory for tax purposes
    • Photographs: 2-3 recent passport-size photos
    • Initial Deposit: Minimum ₹500 (can be more)
    • Nomination Form: Highly recommended

    Some banks may require additional documents like salary certificate or bank statements. For minor accounts, guardian's documents and child's birth certificate are also required.

    How accurate is this PPF calculator?

    Our PPF calculator is highly accurate and uses the official formula prescribed by the Government of India. However, there are a few considerations:

    • The calculator assumes a constant interest rate throughout the tenure
    • Actual PPF rates are reviewed quarterly and may change
    • The calculation assumes deposits are made at the beginning of each year
    • Timing of deposits within the year can affect actual returns

    For most practical purposes, the calculations are very close to actual results. The current rate of 7.1% has been stable for several years, making projections reliable.

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    Additional Resources & Information

    PPF Account Providers

    • • State Bank of India (SBI)
    • • All Nationalized Banks
    • • ICICI Bank, HDFC Bank, Axis Bank
    • • Post Offices across India
    • • Kotak Mahindra Bank
    • • Punjab National Bank

    PPF Investment Tips

    • • Start early to maximize compounding
    • • Invest maximum ₹1.5L annually
    • • Deposit before 5th of each month
    • • Consider extending beyond 15 years
    • • Use nomination facility
    • • Plan for loan/withdrawal needs

    Disclaimer

    The calculations provided by this PPF calculator are for illustrative purposes only and based on current interest rates and tax laws. Actual returns may vary based on changes in interest rates, government policies, and individual circumstances. PPF interest rates are subject to quarterly review by the Government of India. Please consult with a qualified financial advisor and verify current rates with your bank or post office before making investment decisions. Past performance and projected returns do not guarantee future results.