PPF Calculator

PPF interest is worked out every month on the lowest balance between the 5th and the end of the month, and credited once a year at the end of the financial year. If you deposit by 5 April, the whole deposit earns interest for the full year, so each year the balance becomes (previous balance + deposit) × (1 + rate). The calculator uses this rule.

For example, ₹1,50,000 a year at 7.1% for 15 years means ₹22,50,000 invested and a maturity value of about ₹40,68,209, so the tax-free interest is about ₹18,18,209.

PPF falls under the exempt-exempt-exempt category: deposits qualify for a deduction under section 80C in the old tax regime, the interest is tax-free and the maturity amount is tax-free. It is backed by the government, so there is no risk of losing money. The long lock-in encourages saving for retirement or a child's education.

The rate is set by the government every quarter and has changed over the years, so the calculator lets you edit it. Try a lower and a higher rate to see a range.

After 15 years you can extend the account in blocks of 5 years, with or without new deposits. Extending with deposits keeps the full benefit of tax-free compounding, and the example shows how 25 years at the maximum deposit grows to more than ₹1 crore. Choose 20, 25 or more years in the calculator to see the effect.

Partial withdrawals are allowed from the seventh financial year, and loans against the balance from the third to the sixth year. Withdrawals reduce the final maturity amount, which the calculator does not include. Missing the minimum deposit of ₹500 in a year makes the account inactive until a small penalty is paid.

You can pay into PPF in one lump sum or in up to twelve instalments a year, but interest for each month is calculated on the lowest balance between the 5th and the last day of that month. Paying the whole year's amount by 5 April earns the most interest, which is what the calculator assumes. If you pay monthly before the 5th of each month, the result is a little lower, roughly what you would get from about half a year less interest on each year's deposit. Setting up a standing instruction from your salary account before the 5th is a simple way to get close to the maximum.