PPF Calculator
Project Public Provident Fund (PPF) maturity amount with yearly contributions and 15-year compounding. See tax-free returns and year-by-year growth.
Calculator
Adjust values & calculate🏛️ PPF Account
✅ PPF Benefits
Growth Over Time
Formula
Each year's deposit earns compound interest for remaining years until maturity. First year deposit compounds for full 15 years, last year deposit for 1 year. Interest is calculated monthly on lowest balance between 5th and month-end.
Last reviewed: January 2026
Worked Examples
Example 1: Maximum Annual Investment
Example 2: Modest Monthly Savings
Example 3: PPF with Extension
Background & Theory
PPF is structured as a 15-year savings scheme with unique features that make it ideal for long-term wealth building with complete capital protection and tax efficiency. **PPF Interest Calculation:** Interest is calculated monthly but credited annually on March 31st. The formula for monthly interest: Interest = Lowest balance between 5th and month-end × (Annual rate / 12) **Optimal Deposit Strategy:** To maximize interest, deposit by the 5th of each month. If depositing annually, deposit on April 1st (or first working day). | Deposit Timing | Interest Earned (₹1.5L/year, 15 years) | |----------------|----------------------------------------| | April 1st (lumpsum) | ₹18,18,209 | | Monthly by 5th | ₹17,89,461 | | End of March | ₹16,71,082 | Difference between best and worst timing: ₹1,47,127! **Tax Benefits Breakdown:** **Section 80C:** Contributions up to ₹1.5L deductible **Interest:** Completely tax-free **Maturity:** No tax on withdrawal **Effective Pre-Tax Equivalent:** | Tax Bracket | PPF 7.1% Equivalent | |-------------|---------------------| | 5% | 7.47% | | 20% | 8.88% | | 30% | 10.14% | For 30% bracket, PPF at 7.1% equals a taxable investment at 10.14%! **Withdrawal Rules:** **Partial Withdrawal (from Year 7):** Maximum = 50% × Balance at end of (current year - 4) One withdrawal per year allowed **Loan Facility (Years 3-6):** Maximum = 25% × Balance at end of (current year - 2) Interest: PPF rate + 1% Repayment within 36 months **Extension Options After 15 Years:** **Option A - With Contributions:** - Continue depositing up to ₹1.5L/year - 80C benefits continue - Extend in 5-year blocks **Option B - Without Contributions:** - No new deposits - Existing balance earns interest - Unlimited partial withdrawals - Great for retirement income **Comparison with Similar Investments:** | Feature | PPF | ELSS | FD | NPS | |---------|-----|------|----|----| | Lock-in | 15 years | 3 years | Flexible | Till 60 | | Returns | 7.1% fixed | 12-15% (volatile) | 6-7% | 9-12% | | Tax on returns | Nil | 10% LTCG | Slab rate | Partial | | Risk | Zero | High | Zero | Medium | | 80C benefit | Yes | Yes | No (mostly) | Yes | **Best PPF Strategy:** 1. Open account early (even with ₹500) for children 2. Deposit maximum ₹1.5L by April 5th each year 3. Never let account become inactive 4. Use loan facility if needed (not withdrawal) 5. Extend with contributions if working, without if retired
History
The Public Provident Fund was introduced in India on July 1, 1968, by the Ministry of Finance. It was designed to encourage small savings among the general public while providing a secure, long-term savings instrument with attractive returns. The scheme was launched under the PPF Act, 1968, initially offering 7% interest. Over decades, interest rates have varied based on economic conditions: - 1986: Peaked at 12% - 2000: 11% - 2012: 8.8% - 2016: 8.1% - 2020: 7.1% (after COVID-related cuts) - 2024: 7.1% (current) The 15-year lock-in was established to create a genuinely long-term savings habit among Indians. Before PPF, most small savers relied on Post Office schemes or bank deposits without tax benefits. Key policy changes over time: - 1987: Maximum limit raised to ₹60,000 - 2014: Limit increased to ₹1.5 lakh (aligning with 80C cap) - 2016: Account opening allowed online - 2018: Interest rate linked to government bond yields (quarterly review) PPF has become one of India's most popular savings schemes, with over 5 crore active accounts. Its EEE tax status makes it unique among savings instruments. The sovereign guarantee means the government of India backs every rupee invested. For NRIs, rules changed in 2017: existing accounts continue until maturity but new accounts cannot be opened. This affects many Indians who move abroad.
Frequently Asked Questions
Formula
Maturity = Σ[Deposit × (1 + r)^(n-year+1)]
Each year's deposit earns compound interest for remaining years until maturity. First year deposit compounds for full 15 years, last year deposit for 1 year. Interest is calculated monthly on lowest balance between 5th and month-end.
Worked Examples
Example 1: Maximum Annual Investment
Problem:Invest ₹1.5 lakh/year (maximum allowed) for 15 years at 7.1% interest.
Solution:Yearly deposit: ₹1,50,000\nTotal deposits over 15 years: ₹22,50,000\n\nYear-wise growth:\nYear 5: ₹9,24,631\nYear 10: ₹21,55,147\nYear 15: ₹40,68,209\n\nInterest earned: ₹40,68,209 - ₹22,50,000 = ₹18,18,209\n\nDirect Section 80C deduction at a 30% bracket:\n₹22,50,000 × 30% = ₹6,75,000\n\nThe calculator also shows the full maturity amount and tax-free interest earned.
Result:₹40.68 lakh maturity | ₹18.18 lakh interest | ₹6.75L direct 80C deduction
Example 2: Modest Monthly Savings
Problem:Invest ₹5,000/month (₹60,000/year) for 15 years.
Solution:Annual deposit: ₹60,000\nTotal deposits: ₹9,00,000\n\nMaturity calculation at 7.1%:\nYear 5 balance: ₹3,69,852\nYear 10 balance: ₹8,62,059\nYear 15 balance: ₹16,27,284\n\nTotal interest earned: ₹7,27,284\n\nEffective return: 80.8% over 15 years\nCompare to FD: Would need 10.2% pre-tax rate to match this for 30% bracket.
Result:₹16.27 lakh from ₹9 lakh investment (81% returns)
Example 3: PPF with Extension
Problem:₹1.5 lakh/year for 15 years, then extend without contributions for 10 more years.
Solution:After 15 years: ₹40,68,209\n\nExtension without new contributions:\nMoney continues growing at 7.1% compound\n\nYear 20: ₹40,68,209 × (1.071)^5 = ₹57,30,186\nYear 25: ₹57,30,186 × (1.071)^5 = ₹80,70,821\n\nTotal interest in extension period: ₹40,02,612\n\nNo new deposits, completely passive growth.\nWithdraw partially for retirement income while balance grows.
Result:₹80.7 lakh after 25 years (₹40L from extension alone!)
Frequently Asked Questions
What is PPF and why should I invest in it?
Public Provident Fund (PPF) is a government-backed long-term savings scheme in India with 15-year lock-in period. Key benefits: 7.1% interest (currently), complete tax exemption (EEE status - contributions, interest, and maturity all tax-free), sovereign guarantee (zero risk), Section 80C deduction up to ₹1.5 lakh/year. Ideal for risk-averse investors seeking guaranteed returns with tax benefits.
What is the current PPF interest rate and how is it set?
As of 2024, PPF interest rate is 7.1% per annum, compounded annually. The rate is set quarterly by the Ministry of Finance based on 10-year government bond yields. Historically ranges 7-8.8%. Interest is calculated on lowest balance between 5th and end of each month, credited annually on March 31st. Deposit by 5th of month to maximize interest for that month.
What is the minimum and maximum investment in PPF?
Minimum: ₹500 per year (required to keep account active). Maximum: ₹1.5 lakh per year (contributions above this earn no interest and don't qualify for 80C). You can deposit in lump sum or up to 12 installments per year. Account discontinuation (no minimum deposit) leads to penalty of ₹50/year to revive, plus missed interest.
When can I withdraw from PPF account?
Partial withdrawal: Allowed from 7th financial year onwards. Maximum 50% of balance at end of 4th preceding year. Loan facility: Available from 3rd to 6th year, up to 25% of balance at end of 2nd preceding year, at 1% above PPF rate. Premature closure: Only for medical emergencies (self/spouse/children) after 5 years, with 1% interest penalty.