Anyone from employed to self-employed can invest in this savings scheme and ensure a safe retirement for themselves. Public Provident Fund (PPF) is one of the best long-term investment options that also offer you tax benefits.
PPF investments are not only safe but also offer a good rate of return to investors. You can use the PPF calculator to estimate your saving needs as per the need of your retirement corpus. PPF Calculator helps you compute how much the principal invested amount will be at maturity and returns on your PPF account.
PPF scheme was drafted by National Savings Institute and launched by the Government of India in April 1968. The scheme was rescinded in 2019 and replaced by the new Public Provident Fund Scheme 2019. The new scheme offers more flexibility for investors and brings PPF features at par with similar long-term investments.
What is PPF Calculator?
PPF calculator is a simple online tool that makes your investment planning efforts with PPF easier. You can use the PPF interest calculator to estimate how much you can save. If you are trying to save for a specific goal, you can also use the PPF account calculator to estimate the monthly savings for the PPF account.
The PPF calculator usually calculates for a tenure of 15 years or more.
PPF Calculator
*Disclaimer:- The PPF Calculator provides estimates based on current interest rates, which are subject to government changes. Actual returns may vary over time. Results are for informational purposes only and do not guarantee future performance or constitute financial advice. Tax benefits and regulations may change, and calculators may not reflect the latest updates. Users should consult a financial advisor for personalized guidance before making investment decisions.
How to Use PPF Calculator?
- Select the Investment Amount: This is the amount you wish to invest in your PPF account. You can input a monthly, quarterly, semi-annual or annual amount. Also, ensure that your investment amount does not exceed Rs 1.5 lakhs a year or Rs 12,500 p.m.
- Select Investment Tenure: This is the time you will continue your PPF investment. The minimum time available is 15 years, and you can extend the term in batches of 5 years after that. The PPF calculator assumes that you will be investing the same amount until maturity.
- Select PPF Interest Rate: The ongoing interest rate of PPF is automatically selected in the PPF calculator.
- Check the Future Value: You can click on the calculate button once you have input all the values if the calculator does not show you the maturity value at the end. You can change the investment amount to increase or decrease the maturity.
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- PPF Calculator helps you resolve queries related to Public Provident Fund account. PPF Calculator also monitors the growth of your invested capital. This becomes crucial because interest rate changes on monthly basis for PPF savings account. With the help of PPF Calculator, it is easier for account holders to find out monthly changes in PPF account interest rates.
- The PPF calculator helps you simplify your investments in PPF. The tool gives you a picture of what your investments will yield after maturity. You can use the information from the PPF calculator to plan your investments better.
- For example, if the current PPF investment is not enough to achieve your goals you may need to increase the contribution. Once you reach the maximum limit in PPF you can start looking for other investment options for better allocation.
- PPF calculator also helps you compare your other investments with PPF returns.
Formula Used to Calculate PPF
How to Calculate PPF?
The PPF interest calculator uses the following formula to estimate your PPF value :
PPF Value = Pmt * [((1+i/nper)^(n*nper) – 1) / (i/nper)]
Where, Pmt is your regular payments
nper is the number of payments per year (i.e. nper = 12 in the case of monthly investments)
i is the annual rate of return on PPF
n is the number of years of investment
For example, if you invest Rs 10,000 p.m. in your PPF account for 10 years and the rate of interest has been 8% the variables will be:
Pmt. = 10,000
nper = 12
i = 8%
n = 10
PPF value after 10 years = Rs 18.3 lakhs
You need to understand the meaning of your PPF calculator estimates in the context of PPF benefits and features.
Here’s how you can interpret all the values of the PPF calculator:
- Opening PPF Balance: The progress in PPF is counted in financial years. Opening balance is the amount of money you have in the PPF account at the beginning of the financial year, i.e., 1st to 5th April of the year.
- Deposited Amount: This is the money you will or have invested throughout the financial year in the PPF account.
- Interest Earned: This is the amount your deposits and PPF balance have earned in the financial year.
- Closing PPF Balance: The closing balance in a PPF account is the balance on the final day of the financial year, i.e., on 31st March.
- Loan Balance: For the first five years (full financial years) withdrawals are not available from the PPF account. But you can borrow out of the balance after the third year of account opening. The balance available for borrowing is 25% of the account balance in the previous financial year of the borrowing year.
- Withdrawals from PPF: You can withdraw part of the PPF balance starting the seventh financial year. Your maximum withdrawal has to be the lower of the following two amounts:
- 50% of the closing balance in the immediately previous financial year
- 50% of the closing balance four years before the withdrawal year
The maturity value or fund value estimated by the calculator automatically assumes that you had not made any partial withdrawals during this time.
Types of PPF Calculator
You need to calculate different amounts based on PPF rules. Considering the different needs for estimating PPF interest, maturity value, withdrawals, etc. you can use the following six types of PPF calculators:
Advantages of Using PPF Calculator
PPF calculator simplifies the PPF calculations for you so that you can easily estimate your maturity, withdrawal limits and investment needs in PPF.
PPF calculator offers the following advantages to you:
- Clearly shows the growth of your investments over the years.
- Helps you plan your investments better. That is whether to increase or decrease your contributions depending on how close you are to your investment goals.
- Saves time in complex annuity calculations.
- Maximise your tax savings with advance estimates of your savings.
- Decide whether to continue PPF investments for an extended period.
What is PPF Interest Rate?
The government of India, more accurately the Ministry of Finance is responsible for deciding the PPF interest rate. The rates are announced every quarter. The current rate of interest for Quarter 2 of the FY 2022-23 is 7.1% p.a.
The interest in PPF accounts is compounded annually. This means that interest will continue to accrue on your account balance for the remaining months of the financial year after a deposit. The accrued interest is added to the principal and reinvested at the end of the financial year.
How PPF Interest Rate is Calculated?
PPF interest is calculated on the minimum balance between the 5th day and the last day of the month. The interest rate for the PPF calculation will be the one announced for the quarter. You can maximise your returns for the year by depositing the maximum amount between the 1st to 5th of April of every financial year.
Example of PPF Interest Calculation
If you deposit Rs 10,000 every month in your PPF account, the interest calculation will be as given below:
1. When you invest the money between the 1st and 5th day of the month.
| Month | Investment | Average Balance (5th & last day) | Rate of Interest | Interest on Deposit |
|---|---|---|---|---|
| April | 10,000 | 10,000 | 7.10% | 59.2 |
| May | 10,000 | 20,000 | 7.10% | 118.3 |
| June | 10,000 | 30,000 | 7.10% | 177.5 |
| July | 10,000 | 40,000 | 7.10% | 236.7 |
| August | 10,000 | 50,000 | 7.10% | 295.8 |
| September | 10,000 | 60,000 | 7.10% | 355.0 |
| October | 10,000 | 70,000 | 7.50% | 437.5 |
| November | 10,000 | 80,000 | 7.50% | 500.0 |
| December | 10,000 | 90,000 | 7.50% | 562.5 |
| January | 10,000 | 1,00,000 | 7.50% | 625.0 |
| February | 10,000 | 1,10,000 | 7.50% | 687.5 |
| March | 10,000 | 1,20,000 | 7.50% | 750.0 |
| Total | 1,20,000 | 4805.0 | ||
| Balance Carried forward to the next financial year | 1,24,80 | |||
2. When you invest after the 5th day of every month.
| Month | Investment | Average Balance (5th & last day) | Rate of Interest | Interest on Deposit |
|---|---|---|---|---|
| April | 10,000 | 5,000 | 7.10% | 29.6 |
| May | 10,000 | 15,000 | 7.10% | 88.8 |
| June | 10,000 | 25,000 | 7.10% | 147.9 |
| July | 10,000 | 35,000 | 7.10% | 207.1 |
| August | 10,000 | 45,000 | 7.10% | 266.3 |
| September | 10,000 | 55,000 | 7.10% | 325.4 |
| October | 10,000 | 65,000 | 7.50% | 406.3 |
| November | 10,000 | 75,000 | 7.50% | 468.8 |
| December | 10,000 | 85,000 | 7.50% | 531.3 |
| January | 10,000 | 95,000 | 7.50% | 593.8 |
| February | 10,000 | 1,05,000 | 7.50% | 656.3 |
| March | 10,000 | 1,15,000 | 7.50% | 718.8 |
| Total | 1,20,000 | 4440.0 | ||
| Balance Carried forward to the next financial year | 1, 24,440 | |||
Note that the accrued interest is not added back to the account balance until the end of the financial year. That is due to the annual compounding of interest in PPF.
So, while the interest rate can vary from quarter to quarter the accrued interest throughout the financial year will start earning interest only in the next financial year.
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PPF Tax Benefits & Withdrawals
The Public Provident Fund (PPF) is a highly tax-efficient, long-term investment option in India, offering significant benefits under the Exempt-Exempt-Exempt (EEE) category. This means that investments, interest accumulation, and withdrawals are entirely tax-free, making PPF an attractive choice for individuals seeking financial security and tax savings.
Tax Benefits at Every Stage
- Tax Deduction on Investments: Contributions to a PPF account qualify for deductions under Section 80C of the Income Tax Act, with a maximum annual limit of ₹1.5 lakh. This helps reduce taxable income while promoting disciplined savings.
- Tax-Free Interest Accumulation: Unlike taxable investment options such as fixed deposits, the interest earned or calculated on a PPF account calculator is completely tax-free. The government revises the interest rate quarterly, ensuring a balance of stability and returns.
- Tax-Exempt Withdrawals: Upon maturity, after 15 years from the date of account opening, both the principal amount and accrued interest can be withdrawn entirely tax-free, making PPF an ideal choice for retirement planning and wealth accumulation.
Withdrawal Rules and Conditions
While the PPF plan calculator is designed as a tool for a long-term savings instrument, the plan does offer limited liquidity options:
- Full Withdrawal at Maturity: After completing 15 years, the entire balance, including interest, can be withdrawn without restrictions, and the account can be closed.
- Partial Withdrawals Before Maturity: If funds are required before the maturity period, partial withdrawals are allowed from the 6th year onwards (after completing 5 years). An account holder can withdraw up to 50% of the balance available at the end of the 4th year preceding the withdrawal year or the balance at the end of the previous year, whichever is lower. Only one partial withdrawal per financial year is permitted.
By combining tax efficiency with long-term wealth accumulation and controlled liquidity, PPF remains one of the most secure and rewarding investment options in India.
Alternatives to PPF
Although PPF accounts are popular and safe investments in India offering total tax exemption, you have multiple alternatives as well. PPF is one of those investments with exempt investment, exempt interest and exempt maturity values. The following investments fall into the same category:
FAQs on PPF Calculator
Public Provident Fund Account or PPF Account is a savings scheme backed by Government that provides long-term investment options, stable returns, and tax benefits. PPF Savings account is one of the most secure investments that can be used to achieve long-term goals such as the creation of a retirement corpus.
Tax savings, safe returns and long-term compounding are some of the most significant benefits of a PPF account. Other than that PPF benefits would include the availability of an emergency fund, safe retirement with tax-free maturity value and wealth creation due to long investment term.
PPF has a lock-in period of five full financial years, excluding the first year of investment. For example, if you start to invest in PPF in FY 2010-11, the lock-in period will end with FY 2015-16. You can start to withdraw money after the lock-in period, which is starting FY 2016-17.
Yes, PPF investment is completely tax-free. The amount you invest in PPF qualifies for deduction under section 80C. The interest earned on the PPF deposit is tax-free. The final maturity value you will receive from a PPF account will also be tax-free. This is why PPF is also called EEE investment. EEE stands for Exempt, Exempt, Exempt indicating exemptions on investment, interest and maturity.
The minimum contribution to a PPF account is Rs 500 per year. If you happen to miss depositing the minimum amount for a year, the account will be deactivated. You can reactivate the account by depositing the minimum amount or more along with a penalty of Rs 50 per year. The penalty and minimum amounts must be paid for each of the years you have missed depositing money.
No, after the new PPF rules announced in 2019, you cannot open more than one PPF account. If you happen to operate more than one PPF account before the announcement you can ask for the merger of such PPF accounts. However, if you have opened the second account after December 12, 2019, the account will be closed without any interest.
Yes, you can open a PPF account through your bank and deposit money online through e-banking. You can also operate your PPF deposit through internet banking at the post office. Post-office e-banking also gives you access to more small savings schemes like RD, Fixed Deposit, NSC, etc.
Yes, you can transfer your PPF account from one post office or bank branch to another. You can visit the branch where you are currently operating your PPF account and apply for a transfer of account. You will need to mention the address of the bank or post-office branch where you want to transfer the account. Upon submitting the request the bank or post office will close your account and send documents to the new branch.
You can close your PPF account only after the lock-in period of 5 years after the account opening. Also, you can only opt for premature closure in specific conditions like:
- You or a member of your family suffers a life-threatening illness
- You need money for your or your child’s higher education
- Account holder’s death
No, after December 12, 2019, you cannot operate more than one PPF account in your name. If you have opened more than one account before this date you will need to merge both accounts. Second PPF accounts opened after 12th December 2019 will be closed off without any interest.
Returns on PPF depend on the interest rate and how much you have invested in your PPF account.
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This calculation is generated on the basis of the information provided and is for assistance only. And is not intended to be and must not alone be taken as the basis for an investment decision. The calculations mentioned above take into consideration an assumed rate of inflation of 8%. The current costs of education mentioned above are approximate values. The end value displayed is on the basis of the information provided and is for assistance only. It is not intended to be and must not alone be taken as the basis for an investment decision.
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