PPF Calculator

What is PPF?

The Public Provident Fund is a Government of India savings scheme that combines a sovereign guarantee with the rare EEE tax status: the contribution is deductible under Section 80C (old regime), the interest is tax-free, and the maturity amount is tax-free. Anyone can open a PPF account at a post office or most banks, contribute between ₹500 and ₹1.5 lakh per financial year, and receive the interest rate the Finance Ministry announces each quarter. The account matures after 15 financial years and can be extended indefinitely in five-year blocks.

How the PPF calculator works

Enter your yearly contribution, the current interest rate and the number of years (15, 20, 25 and so on). The calculator assumes the full contribution is deposited at the start of each financial year so it earns interest for all twelve months, then compounds the balance annually — matching how PPF interest is credited on 31 March. The year-wise table shows invested amount, interest for the year and closing balance.

PPF formula

Balance at end of year n = (Previous balance + contribution) × (1 + r)

Applied year after year for 15 years, ₹1.5 lakh a year at 7.1% grows to about ₹40.7 lakh on ₹22.5 lakh invested — roughly ₹18 lakh of tax-free interest. Extend to 25 years and the balance crosses ₹1 crore, with more than half of it being interest.

The 5th-of-the-month rule

PPF interest for a month is calculated on the lowest balance between the 5th and the last day of that month. If you deposit on the 6th, that month’s interest ignores your deposit. So deposit lump sums on or before the 5th April each year, or monthly instalments on or before the 5th, to capture the full interest. Depositing at the start of the year rather than in twelve monthly pieces earns noticeably more over 15 years — the calculator models the start-of-year scenario.

Withdrawals, loans and extension

• Partial withdrawal is allowed from the 7th financial year, up to 50% of the balance at the end of the 4th preceding year.
• Loan against PPF is available between the 3rd and 6th years at a low interest rate.
• Premature closure is permitted after five years only for specific reasons (serious illness, higher education, change of residency) with a 1% interest penalty.
• At maturity you can withdraw everything, extend with contributions (submit Form H within a year), or extend without contributions and keep earning interest with one withdrawal per year.

PPF vs other 80C options

Compared with ELSS mutual funds, PPF gives lower but guaranteed returns. Compared with tax-saver FDs and NSC, PPF wins because its interest is tax-free. For a conservative investor who has already used up their EPF, PPF is usually the first ₹1.5 lakh of 80C investment each year. Under the new tax regime the 80C deduction is not available, but the tax-free interest and maturity still apply.

Frequently asked questions