PPF Calculator
Use this Public Provident Fund (PPF) calculator to estimate the maturity amount of your PPF investment. PPF is a popular long-term savings scheme in India, known for its tax benefits and risk-free returns.
Enter your annual contribution to PPF (min ₹500, max ₹1.5 lakh).
Enter the current annual PPF interest rate.
Enter the total number of years you plan to invest (minimum 15 years for maturity).
Understanding Public Provident Fund (PPF)
The Public Provident Fund (PPF) is a long-term investment scheme backed by the Government of India. It was introduced in 1968 with the primary objective of mobilizing small savings and providing a secure retirement corpus for individuals. PPF is highly popular due to its EEE (Exempt-Exempt-Exempt) tax status, meaning contributions, interest earned, and maturity amount are all tax-exempt under Section 80C of the Income Tax Act.
Key Features of PPF
- Maturity Period: The standard maturity period for a PPF account is 15 years. After maturity, you have options to withdraw the full amount or extend the account in blocks of 5 years, with or without further contributions.
- Contribution Limits: You can deposit a minimum of ₹500 and a maximum of ₹1.5 lakh in a financial year. Contributions can be made in a lump sum or in up to 12 installments.
- Interest Rate: The interest rate for PPF is declared by the government quarterly. It is compounded annually. While the rate can change, it typically offers competitive returns compared to other fixed-income instruments.
- Tax Benefits: PPF offers significant tax benefits. Contributions are eligible for deduction under Section 80C, the interest earned is tax-free, and the maturity amount is also tax-exempt.
- Loan and Withdrawal Facilities: Partial withdrawals are allowed from the 7th financial year onwards. Loans against PPF balance are available from the 3rd to the 6th financial year.
- Risk-Free: Being a government-backed scheme, PPF carries no market risk, making it a safe investment option.
How the PPF Calculator Works
Our PPF calculator helps you estimate the total maturity amount you will receive based on your annual investment, the prevailing interest rate, and your chosen investment period. It uses an iterative calculation method, simulating the annual compounding of interest on your contributions and accumulated balance.
For example, if you invest ₹1,00,000 annually for 15 years at an average interest rate of 7.1%:
- Total Investment: ₹1,00,000 * 15 = ₹15,00,000
- Total Interest Earned: The calculator will compute this based on annual compounding.
- Maturity Amount: This will be the sum of your total investment and the total interest earned.
The calculator assumes annual contributions and annual compounding. While actual PPF interest is calculated monthly on the lowest balance between the 5th and the end of the month, for long-term projections and simplicity, annual compounding on the total balance is a widely accepted and close approximation for such calculators.
Why Use a PPF Calculator?
- Financial Planning: Helps you plan your long-term savings goals, such as retirement, child's education, or buying a house.
- Goal Setting: Allows you to see how different annual investment amounts or interest rates can impact your final corpus.
- Comparison: Useful for comparing PPF returns with other investment options.
- Motivation: Visualizing the potential maturity amount can motivate you to maintain consistent contributions.
Remember that the interest rate used in the calculator is an assumption. Actual PPF interest rates are subject to change by the government every quarter. For precise calculations, always refer to the official rates applicable during your investment period.