PPF Calculator

How PPF Calculator Works

What is PPF?

The Public Provident Fund (PPF) is a government-backed long-term savings scheme launched in 1968 and run through banks and post offices across India. You invest between ₹500 and ₹1,50,000 per financial year, the government pays a guaranteed interest rate (currently 7.1% p.a., revised quarterly by the Ministry of Finance), and the account matures after 15 years.

PPF’s defining feature is its EEE (Exempt-Exempt-Exempt) tax status: the deposit is deductible under Section 80C, the interest is completely tax-free, and the maturity amount is completely tax-free. No other guaranteed-return instrument in India offers all three exemptions.

Why PPF Beats Taxable Alternatives

Because PPF interest is tax-free, its effective pre-tax equivalent is much higher than the headline rate. For an investor in the 30% tax bracket, 7.1% tax-free equals roughly 10.1% from a taxable instrument — more than any bank FD or RD currently pays. Add the Section 80C deduction on the way in, and PPF is the strongest guaranteed-return product available to Indian savers.

PPF Interest Formula

PPF interest is compounded annually and credited on March 31. For a deposit made at the start of each financial year (before April 5), the maturity follows the annuity-due formula:

M = P × [((1 + i)ⁿ − 1) ÷ i] × (1 + i)

Where P is the yearly deposit, i is the annual rate as a decimal, and n is the number of years.

For monthly deposits, interest is calculated on the lowest balance between the 5th and the end of each month — a deposit made before the 5th earns interest for that month. This calculator models that rule exactly: each monthly instalment earns pro-rata interest for its remaining months of the year, and the balance compounds annually.

Worked Example

₹1,50,000 per year at 7.1% for 15 years (deposited before April 5 each year):

• Total invested = 1,50,000 × 15 = ₹22,50,000
• Maturity amount ≈ ₹40,68,209
• Tax-free interest earned ≈ ₹18,18,209
• Effective annual growth on total contributions ≈ 4.03% — lower than 7.1% because later deposits stay invested for fewer years (each rupee itself earns the full 7.1%; see the CAGR Calculator for how annualized growth works)

The same ₹1,50,000 per year continued to 20 years grows to about ₹66,58,288, and to 25 years crosses ₹1.03 crore — the power of the last extension blocks, where compounding does most of the work.

Contribution Rules

• Minimum: ₹500 per financial year (account becomes inactive below this; revival costs ₹50 per lapsed year plus arrears).
• Maximum: ₹1,50,000 per financial year across all your PPF accounts combined. Excess deposits earn no interest and no 80C benefit.
• Timing: deposit before the 5th of a month to earn that month’s interest. For the full-year benefit, deposit the lump sum before April 5.
• Frequency: any number of deposits per year (since 2019 there is no 12-instalment limit).
• One account per person: plus one as guardian per minor child.

Lock-in Period and Extension Rules

PPF has a 15-year lock-in from the end of the financial year of account opening. After maturity you can:

• Withdraw everything tax-free and close the account;
• Extend in 5-year blocks with fresh contributions (submit Form H within 1 year of maturity) — any number of times; or
• Extend without contributions (the default if you do nothing) — the balance keeps earning tax-free interest, and one withdrawal of any amount is allowed per year.

Partial Withdrawal Summary

Section 80C Tax Benefits

PPF deposits qualify for deduction under Section 80C up to ₹1,50,000 per year (old tax regime). For a 30%-bracket taxpayer, the maximum deposit saves about ₹46,800 in tax each year including cess — effectively an instant return before any interest accrues. Combined with tax-free interest and tax-free maturity, PPF is India’s only mainstream EEE instrument alongside EPF and Sukanya Samriddhi. Note: under the new tax regime the 80C deduction is not available, but the interest and maturity remain fully tax-free in both regimes.

PPF vs FD, RD, and SIP

A balanced long-term plan often pairs PPF (guaranteed, tax-free floor) with a SIP (market-linked growth). Project the market side with the Compound Interest Calculator, and compare any past investment’s performance against your PPF’s effective growth using the CAGR Calculator. For a full side-by-side analysis with engine-computed examples, read PPF vs FD — which is better?