The Public Provident Fund (PPF) is one of the most trusted long-term savings schemes in India. Backed by the Government of India, it offers guaranteed returns, tax benefits under Section 80C, and a completely tax-free maturity amount. With a lock-in period of 15 years and annual compounding, PPF is widely used for retirement planning and secure wealth creation.
To make the most of your investment, it is important to understand how to calculate Public Provident Fund or how PPF maturity is calculated. The maturity depends not only on the investment amount and interest rate, but also on when you deposit – yearly lump sum, monthly before 5th, or monthly after 5th.
Overview of Public Provident Fund (PPF)
| Factor | Details |
|---|---|
| Tenure | 15 years (extendable in 5-year blocks) |
| Interest Rate | Current Rate – 7.1% per annum [ Declared by the Government every quarter ] |
| Minimum Deposit | ₹500 per year |
| Maximum Deposit | ₹1.5 lakh per year |
| Compounding | Annually (interest credited once a year) |
| Tax Benefit | Section 80C deduction + tax-free maturity |
How can a PPF calculator help you?
This financial tool allows one to resolve their queries related to Public Provident Fund account. There are certain specifications that are to be abided by while calculating maturity amount after a certain point of time. It keeps a track on the growth of your capital. Those who already have a PPF savings account know that interest rates change on monthly basis.
Nowadays, it is easier to keep a check on changing rates. However, with the discovery of public provident fund calculator, account holders find it easier to find out monthly changes made in interest. In the market, you may find lot of user-friendly PPF calculators and for choosing trustworthy ones, Groww is simply the option.
Formula to calculate Public Provident Fund (PPF)
For lump sum yearly deposits, the maturity follows the compound interest formula:
A = P × (1 + r/n)(n × t)
- A = Maturity amount
- P = Investment amount
- r = Interest rate (annual)
- n = Compounding frequency (for PPF = 1)
- t = Tenure in years
For monthly deposits, calculations differ due to the 5th date rule.
Case 1: PPF Calculation if Investment is yearly Lump Sum
If you invest ₹1.5 lakh once every April:
- Total investment = ₹22.5 lakh
- Maturity after 15 years ≈ ₹40 lakh
- Interest earned ≈ ₹17.5 lakh
Year-wise Example (Yearly Lump Sum)
| Year | Deposit (₹) | Interest (₹) | Balance (₹) |
|---|---|---|---|
| 1 | 1,50,000 | 10,650 | 1,60,650 |
| 2 | 1,50,000 | 24,131 | 3,34,781 |
| 3 | 1,50,000 | 28,770 | 5,12,551 |
| 5 | 1,50,000 | 67,421 | 8,79,972 |
| 10 | 1,50,000 | 2,01,947 | 19,01,947 |
| 15 | 1,50,000 | 5,00,000+ | ~40,00,000 |
Case 2: PPF Calculation if Investment is Monthly (Before 5th)
If you invest ₹12,500 per month (₹1.5 lakh yearly) before the 5th of every month:
- Total investment = ₹22.5 lakh
- Maturity after 15 years ≈ ₹40.6 lakh
- Interest earned ≈ ₹18.1 lakh
Year-wise Example (Monthly Before 5th)
| Year | Total Deposits (₹) | Interest (₹) | Balance (₹) |
|---|---|---|---|
| 1 | 1,50,000 | 10,800 | 1,60,800 |
| 2 | 3,00,000 | 24,300 | 3,35,100 |
| 3 | 4,50,000 | 29,100 | 5,14,200 |
| 5 | 7,50,000 | 68,800 | 8,91,800 |
| 10 | 15,00,000 | 2,05,000 | 19,15,000 |
| 15 | 22,50,000 | 5,10,000+ | ~40,60,000 |
Case 3: PPF Calculation if Investment is Monthly But After 5th
If you deposit after the 5th, that month’s deposit does not earn interest:
- Total investment = ₹22.5 lakh
- Maturity after 15 years ≈ ₹39.8 lakh
- Interest earned ≈ ₹17.3 lakh
Year-wise Example (Monthly After 5th)
| Year | Total Deposits (₹) | Interest (₹) | Balance (₹) |
|---|---|---|---|
| 1 | 1,50,000 | 10,400 | 1,60,400 |
| 2 | 3,00,000 | 23,500 | 3,23,900 |
| 3 | 4,50,000 | 28,000 | 5,01,900 |
| 5 | 7,50,000 | 66,000 | 8,79,000 |
| 10 | 15,00,000 | 1,95,000 | 18,95,000 |
| 15 | 22,50,000 | 5,00,000 | ~39,80,000 |
Comparison of PPF Calculation in All Three Cases
| Case | Deposit Pattern | Total Investment (₹) | Maturity Value (₹) | Total Interest Earned (₹) |
|---|---|---|---|---|
| Case 1 | ₹1.5 lakh lump sum in April | 22,50,000 | ~40,00,000 | ~17,50,000 |
| Case 2 | ₹12,500 monthly (before 5th) | 22,50,000 | ~40,60,000 | ~18,10,000 |
| Case 3 | ₹12,500 monthly (after 5th) | 22,50,000 | ~39,80,000 | ~17,30,000 |
Why is the 5th of month is Important in PPF?
PPF interest is calculated on the lowest balance between the 5th and the last day of the month. Deposits made on or before the 5th earn interest for that month. Deposits after the 5th start earning interest only from the next month. This is why investing before the 5th helps maximize returns.
Why Use a PPF Calculator?
Manual PPF calculation is complex because interest is calculated monthly, credited yearly, and rates change every quarter.
The easiest option is to use our PPF Calculator Tool. It instantly shows maturity value, total deposits, and total interest earned.
How to use PPF calculator?
To enjoy this computing tool to the maximum, you need to understand how it works. Its user-friendly and accurate information makes it a device worthy of purchase. The only job of the user is to put values within specific columns and you are good to go. Details that are to be provided to this PPF amount calculator include tenure, total amount invested, interest earned and also amount invested monthly or yearly.
- Enter the values in the requisite fields and the total maturity amount will be reflected within seconds.
- If an individual deposits amount on 1st of April then interest will be calculated based on financial year. Inflation might affect this interest rate.
Key Points to Remember for PPF investment
- Deposit before 5th of the month to maximize returns.
- Maximum deposit = ₹1.5 lakh per year.
- Lock-in period = 15 years (extendable in 5-year blocks).
- Withdrawals allowed after 7 years.
- PPF is EEE: tax-free investment, tax-free interest, and tax-free maturity.
The Benefits of Investing in PPF are:
Minimal Risk: Since the Government backs the PPF account, the returns are assured and the risks minimized. The PPF account also ensures complete capital protection.
Fully exempt: The interest and PPF account maturity proceeds are exempted from tax.
Tax deduction: The deposits made to the PPF account are eligible for tax deduction under section 80C of the Income Tax Act of 1961.
Ease of account opening: The PPF account can be opened at almost all banks and post offices.
FAQs on PPF Calculation
Q1. Why is 5th the cutoff date in PPF?
Ans: Interest is calculated on the lowest balance between the 5th and last day of the month. Deposits made before the 5th earn interest for that month, while deposits after the 5th start earning interest from the next month.
Q2. Which is better: yearly or monthly investment?
Ans: Yearly lump sum in April gives maximum maturity. Monthly deposits before the 5th earn almost the same, while deposits after the 5th result in slightly lower returns.
Q3. How much will I get if I invest ₹5000 per month?
Ans: At an interest rate of 7.1%, investing ₹5000 per month will give you around ₹16 lakh after 15 years, provided deposits are made before the 5th of each month.
Q4. Can I deposit more than ₹1.5 lakh per year?
Ans: Yes, you can deposit more than ₹1.5 lakh, but the extra amount will not earn interest or qualify for tax benefits under Section 80C.
Q5. How is interest credited in PPF?
Ans: Interest in PPF is calculated monthly but credited to the account once a year at the end of March.
Q6. Can NRIs open a PPF account?
Ans: No, only resident Indians can open a PPF account. NRIs are not eligible.
Q7. Is PPF better than FD?
Ans: PPF is better for long-term savings as it offers tax-free maturity and generally higher post-tax returns than fixed deposits (FDs).
Conclusion
PPF is a safe, long-term, and tax-efficient investment ideal for wealth creation. By investing consistently and depositing early, you can maximize returns and build a strong retirement corpus. PPF is a safe and tax-efficient way to save for the long term. Your maturity amount depends on how and when you invest:
- Yearly lump sum in April → maximum returns
- Monthly before 5th → almost same as lump sum
- Monthly after 5th → slightly lower returns
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