# PPF Calculator

Created by Tibor Pál, PhD candidate and Purnima Singh, PhD
Reviewed by Dominik Czernia, PhD and Jack Bowater
Last updated: Nov 09, 2022

Omni's PPF calculator allows you to calculate the return on your Public Provident Fund investment scheme.

Are you looking for a safe investment option that can offer attractive interest rates as well as tax benefits? The Public Provident Fund scheme might be the only solution you need.

Continue reading to learn what a PPF account is and how to open one. You will also learn about the benefits of PPF investments, how to use the Public Provident Fund calculator, and see an example of how to calculate PPF returns.

If you would like to estimate TDS-related charges (Tax Deducted at Source), you may also check our TDS interest calculator. Or the EPF calculator which helps you evaluate how much you would accumulate during employment while contributing to the Employees' Provident Fund (EPF).

## What is a PPF account?

The Public Provident Fund, or PPF, is an initiative by the Indian government to encourage small investors to make long-term investments. The scheme was introduced in 1968.

How to invest in PPF? You can open a PPF account at any authorized bank or Post Office and start investing with as little as Rs. 500 per year. To promote long-term investment, this scheme comes with a lock-in period of 15 years.

The PPF scheme offers attractive interest rates and tax benefits. Investors can use this scheme to get guaranteed risk-free returns and build a retirement corpus. After learning what the Public Provident Fund is, let's see how to estimate its return.

## How to calculate PPF return?

To find the return on PPF investment in our PPF account calculator, we use the following formula:

$\small FV = P \left ( \frac{(1+r)^n - 1}{r} \right ) (1+r)$

Where,

• $FV$ - Future value of your investment, or its maturity value;
• $P$ - Annual installments;
• $n$ - Number of years the investment if for; and
• $r$ - Rate of interest.

To further understand it, let us imagine that you invest Rs. 1.5 lakh for 15 years and the annual rate of interest is 7.1%.

• As you are making yearly payments, the total investment made in 15 years is:
$\quad \quad \scriptsize \begin{split} \rm Total\ investment &= 15 \times 1,50,000\\ & = \rm Rs.\ 22,50,000 \end{split}$
• The maturity value of your investment will be:
$\quad \quad \scriptsize \begin{split} FV &= 1,50,000 \\ &\times \frac{{(1 + 0.071)^{15} - 1}}{ 0.071} \times (1 + 0.071) \\ FV &= \rm Rs.\ 40,68,209 \end{split}$
• You can calculate the total interest earned as:
$\quad \quad \scriptsize \begin{split} \rm interest &= 40,68,209 - 22,50,000 \\ &= \rm Rs.\ 18,18,209 \end{split}$

Does that sound complicated? It shouldn't be with our tool! You can use the PPF calculator for monthly deposits or any other frequencies to quickly assess the final balance of your investment.

## How to use the PPF interest calculator?

Now let us see how we can use the PPF interest calculator to estimate the return of your PPF investments under the same conditions as above (which we put into brackets):

PPF inputs

1. Choose your preferred deposit frequency (Yearly) and provide the deposit amount (Rs. 1,50,000).

2. Input the annual interest rate (7.1%).

3. Enter the tenure of your planned investment, i.e., 15 years. You can also set the date when you plan to start your investment.

4. Our PPF calculator also has the option of giving inflation-adjusted returns. For the sake of simplicity, we will set it to 0%.

Results

1. The calculator will display the final balance (Rs. 40,68,209) of your PPF account. It will also give a summary of your investment, i.e., payments made by you (Rs. 22,50,000) and the total returns earned on your investment (Rs. 18,18,209).

2. Finally, you can find a detailed account of your capital growth over the years in the form of a chart of balances and a table of payment schedules.

What's more, we added the ability for you to determine the periodic investments you need to make to reach a specific target amount. For example, use the PPF calculator for monthly depositions determination.

## How to open a PPF account?

Any Indian citizen can open a PPF account by visiting either a Post Office or any authorized bank branch and submitting the following documents:

• Filled PPF account opening application form;
• Address and identity proof; and
• Cheque for the first deposit amount.

Some banks also allow you to open a PPF account online without visiting the bank branch office. Be sure to check PPF rules that each specific bank enforces.

## Interest rate on PPF

The PPF interest rate is set by the Ministry of Finance each year. The interest rate on a PPF account was 7.1% in 2021.

The interest is calculated on the lowest balance between the end of the fifth day and the last day of the month. Therefore, to maximize your PPF investment return, you should try to pay your periodic deposit before the 5th day of the month.

## What are the benefits of a PPF account?

Some benefits of a PPF account are:

• Tax benefits - The deposits made into a PPF account qualify for tax deduction under Sec.80-C of the Income Tax Act. The interest earned is also free from income tax under Section-10 of the I.T. Act.

• Safe investment option - The Government of India manages the PPF scheme. Hence it is a safer option than mutual fund schemes. The most crucial benefit of a PPF account is that its balance can't be attached under any order or decree of a court of law regarding any debt or liability incurred by the account holder.

• Attractive interest rates - The PPF scheme offers higher interest rates than other investment options, such as fixed deposit, recurring deposit, or Post Office monthly income scheme. You can compare the returns from these schemes using the FD calculator, RD calculator, and the post office monthly income scheme calculator.

• Transferable - You can easily transfer your PPF account from one bank to another without breaking any specific PPF withdrawal rules.

• Facility to avail loan - You can avail a loan against your PPF account from the 2nd financial year up to the 6th financial year.

## Other important PPF rules

Some other important points to keep in mind while opening a PPF account are:

• Minimum contribution - If you fail to deposit a minimum of Rs. 500 in the PPF account during a financial year, the account will be treated as discontinued. To revive a discontinued account, you need to pay a penalty of Rs. 50 along with arrears of the minimum deposit amount (Rs. 500) for each year of default.

• PPF lock-in period - All PPF accounts have a lock-in period of 15 years during which you can not close the account except under certain conditions, e.g., death of account holder, change of residency status, etc.

• PPF withdrawal rules - You can withdraw up to 50% of your account balance after the ending of the 5th financial year.

• Extension of account after maturity - After the maturity of your scheme, i.e., 15 years, you can choose to continue your account with or without making any further contributions.

• Joint account - You can not open a joint account under this scheme.

## PPF calculator disclaimer

You should consider the PPF calculator as a model for financial approximation. All payment figures, balances, and interest figures are estimates based on the data you provided in the specifications that are, despite our best effort, not exhaustive.

For this reason, we created the calculator for instructional purposes only. Still, if you experience a relevant drawback or encounter any inaccuracy, we are always pleased to receive helpful feedback and advice.

## FAQ

### How to invest in PPF?

To invest in a PPF scheme, you need to open a PPF account in a bank/Post Office. You can subsequently invest into that account as per your convenience, i.e., either in a lump sum or in installments.

The PPF investment limits are between Rs. 500 and 1,50,000 per financial year.

### Who can open a PPF account?

Any Indian citizen can open a PPF account either in his name or in the name of a minor whom is in there guardianship.

You need to submit a filled PPF account opening application form, proof of address and identity, and a cheque for the first deposit amount.

### What is the tenure of a PPF account?

The minimum tenure of a PPF account is 15 years. You can further extend the term of your investment in blocks of 5 years.

### What is the investment limit on PPF account?

You can invest a maximum of Rs. 1.5 lakh into a PPF account per financial year. The minimum deposit limit is Rs. 500.

### Can a NRI invest in a PPF account?

No, non-resident Indians (NRIs) cannot open a new PPF account. However, if you opened a PPF account when you were still a resident of India, you can maintain such an account until maturity.

### What is the age limit for PPF account?

There is no age limit for opening a PPF account. However, an account opened for a minor should be operated by a guardian on behalf of the minor.

### What is the best month and time to invest in PPF?

To get maximum return from your PPF investment, deposit your entire yearly investment in the first month of the financial year, i.e., April. This way you can earn interest on your deposit for the whole year.

The PPF interest is calculated on the lowest balance between the closing of the fifth day and the end of the month. Hence, try to make your deposit by the fifth.

### How many PPF accounts I can have?

Only one. An individual can open only one PPF account. However, as a guardian, you can also open one account in the name of a minor.

### What is PPF interest rate?

The current PPF interest rate is 7.1% as of 2021. The rates are revised by the government every quarter.

### Is PPF taxable?

No, the interest earned from a PPF account is not taxable. The deposits made into a PPF account are also eligible for tax deductions.

Tibor Pál, PhD candidate and Purnima Singh, PhD
I'd like to know the...
final balance
PPF inputs
Deposit payment
$Deposit frequency Monthly Interest rate % Tenure yrs Start date Inflation rate % Results Your initial investment will become$157,722.74 at the end of the term.
 Final balance $157,722.74 Monthly deposit$500.00 Total deposit $90,000.00 Total return$67,722.74 Number of deposits 180 End of term Feb. 5, 2038
Display...
chart of balances
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