Check how much you can earn with PPF
- Monthly
- Quarterly
- Yearly
- Graph
- Table
Invested | Interest | Maturity amount |
---|---|---|
₹5 Lacs | ₹7.97 Lacs | ₹12.97 Lacs |
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Public Provident Fund (PPF) is one of the most popular government-backed tax saving investment schemes in India. The PPF calculator is a free online tool that you can use to calculate the long-term returns you can get from your public provident fund investments.
Invested | Interest | Maturity amount |
---|---|---|
₹5 Lacs | ₹7.97 Lacs | ₹12.97 Lacs |
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A PPF calculator is an online tool that helps you estimate the investment value of your monthly, quaertly or yearly Public Provident Fund (PPF) investment over a certain time period.
When you use a PPF calculator, it will simply apply the PPF calculation formula to calculate the total value of your investment after a certain number of years, given a certain PPF account interest rate.
PPF account calculator can also help you plan for retirement. PPFs have a 15-year lock-in period, which means PPF can be a great way to take a disciplined approach to invest for retirement. If you already have a retirement corpus in mind, you can look at how much you’ll need to invest over a certain period to achieve your retirement goal. However, note that the yearly contribution to a PPF account is capped at ₹1.5 lakh.
A PPF calculator in India requires just two inputs from you. When you open the ET Money PPF calculator, you’ll need to key in the annual contributions you expect to make over the next certain number of years, and the number of years for which you’ll continue contributing.
The PPF account interest rate is considered for change every quarter, and can be changed if the government believes a change is warranted. So, the calculator will also use the current interest rate offered on PPF automatically. As of October 2021, the rate is 7.1% per annum, so that’s what will be used for calculating your PPF returns and maturity value.
Once you have all inputs in place, you’ll automatically see the output. You’ll see the breakdown of the maturity value as the principal amount that you’d have invested and the returns you’d have generated over your investment tenure. The PPF calculator computes these numbers using the PPF calculation formula.
Using the online PPF calculator makes calculating your returns easy. However, there are several other benefits, as well. Following are some advantages:
A Public Provident Fund calculator uses the same formula that’s used for calculating the future value of an annuity. In simpler words, it calculates the future value of your investment, based on the annual contribution you make towards the PPF and the prevailing PPF account interest rate. Following is the PPF calculation formula that a PPF return calculator uses:
*M = P [ ( { (1 + i) ^ n } - 1 ) / i ] ( 1 + i )**
Where:
The part after the P in the formula is the annuity factor, which when multiplied with the annual contribution, gives the maturity value of the PPF investment. Let’s use an example to calculate the maturity value of a PPF account with the following particulars:
Annual Contributions |
₹1 lakh |
PPF Account Interest Rate |
7.1% |
Number of Years |
15 |
Let’s plug the information into the PPF calculation formula:
M = ₹ 1 lakh [ ( { (1 + 7%) ^ 15 } - 1 ) / 7% ] x (1 + 0.07)
M = ₹ 27, 12, 139
If the interest rate changes, you’ll need to make the same calculation, but for different periods. For instance, if the rate was 7% for 5 years, and 8% for the next 5 years, you’d first calculate the maturity value for 10 years at 7% on the amount deposited during the first five years, and add it to the maturity value for 5 years at 8% on the amount deposited during the subsequent 5 years.
Please note that you can also set your PPF calculator to monthly contributions (i.e., yearly contributions ÷ 12). However, the result will be the same as when you set the calculator to yearly contributions.
The Public Provident Fund (PPF) is a long-term savings and investment scheme that is backed by the Indian government. It was introduced by the Indian government to encourage savings and provide financial security for individuals after their retirement. PPF accounts can be opened (online or offline) in designated banks and post offices across the country.
Here are some key features of the Public Provident Fund:
Long-Term Investment: PPF is a long-term investment scheme with a maturity period of 15 years, which can be extended in blocks of 5 years after maturity.
Tax Benefits: Contributions made to a PPF account are eligible for tax deductions under Section 80C of the Income Tax Act in India. The interest earned on the PPF account is also tax-free.
Fixed Interest Rate: The government declares the interest rate for PPF accounts, and it is usually higher than the interest rates offered by regular savings accounts. The interest rate is typically revised every quarter, currently it is 7.1% per annum.
Lock-in Period: While the minimum investment period is 15 years, partial withdrawals are allowed from the 7th year onwards, subject to certain conditions and limits.
Loan Facility: PPF account holders can avail of loans against their PPF balance from the 3rd year to the 6th year of account opening.
Nomination: Account holders can nominate a beneficiary who will receive the accumulated funds in case of the account holder's demise.
Transferability: PPF accounts can be transferred from one authorized bank or post office to another, which offers flexibility to the account holder.
No Risk of Market Fluctuations: Unlike some other investment options, PPF carries no risk of market fluctuations as it is a government-backed scheme.
Retirement and Financial Security: PPF is often used as a means to save for retirement or for meeting long-term financial goals due to its safety and tax benefits.
You don’t need to pay any tax on the invested amount when you invest in PPF. You can use a PPF amount calculator to see how your maturity value differs over investment tenures. Of course, the greater the investment tenure, the larger your maturity value. To give you a sense of how much your investment tenure can impact your maturity value, here’s a table that shows PPF maturity values over different investment tenures:
Investment Tenure (years) | Annual Contribution (₹) | Principal Invested (₹) | PPF Account Rate (%) | Maturity Value (₹) |
---|---|---|---|---|
1 |
1 lakh |
1 lakh |
7.1 |
1,07,100 |
5 |
1 lakh |
5 lakh |
7.1 |
6,17,134 |
10 |
1 lakh |
10 lakh |
7.1 |
14,86,749 |
15 |
1 lakh |
15 lakh |
7.1 |
27,12,139 |
20 |
1 lakh |
20 lakh |
7.1 |
44,38,859 |
Note: 7.1% is the current rate, and is subject to change in the future.
PPF is a simple investment option that helps individuals to build a retirement corpus. It is backed by the government, carries negligible risks, and offers a tax-efficient way to invest over the long term, particularly for retirement. However, since you’ll make multiple contributions to a PPF account, it may be a little challenging to calculate the maturity value manually, even if you know the formula. Therefore, using a PPF calculator online can be helpful and make the calculations a lot easier for you.
Public Provident Fund or PPF is a long term savings cum investment scheme that offers attractive interest rates and tax savings. Investors typically use PPF as a tool to build a corpus for long term goals like retirement. It has a maturity period of 15 years, which can be extended depending on the investor’s requirement.
The maturity amount depends on the investments made throughout the tenure and the interest accrued on it. While the minimum investment for PPF is Rs 500, the maximum investment amount is capped at Rs 1.5 lakhs per year.
At the current rate of 7.1% p.a., you can receive up to Rs 40.86 lakhs if you invest Rs 1.5 lakhs annually. You can also use the above PPF calculator to know your customized maturity amount.
The interest rate of PPF schemes is not fixed and keeps changing every year. Whenever the govt of India revises interest rates, the new rates are applied to both existing and new PPF account holders. The current rate offered to PPF investors is 7.1%
Public Provident Fund (PPF) accounts in India can be opened at several banks, including both public and private sector banks such as State Bank of India (SBI), Punjab National Bank (PNB), HDFC Bank, ICICI Bank, Axis Bank, and Post Offices.
FDs offer better liquidity as you can invest in it from anywhere between 7 days and 10 years. But in PPF, there is a lock-in period of 15 years. Premature withdrawals are allowed after the completion of six years.
However, PPF offers a higher interest rate than FDs. So, PPF can be more useful for long term goals like retirement. So, it all depends on your requirements.
All PPF schemes have a 15-year lock-in period. However, the premature withdrawal facility starts after the completion of six years i.e. seventh year onwards with certain terms and conditions.
Yes, all maturity proceeds from a PPF account are exempt from Capital Gains Tax or Wealth Tax. Moreover, PPF deposits qualify for deduction under section 80C of the IT Act. So if you invest in PPF, you can get a tax deduction of up to Rs 1.5 lakhs per year.
Under the PPF rules of 2019, an individual cannot open more than one PPF account. If anyone has two or more accounts on or after 12 December 2019, all the accounts shall be closed without any interest payment. There is also no provision for merging the accounts.