PPF calculator India

PPF Calculator – Public Provident Fund

This PPF Calculator helps you to calculate interest in PPF (Public Provident Fund) Account. Every month interest can be known using this PPF Calculator.

The balance at the end of a financial year can help you to calculate interest in upcoming years in PPF, which has a lock in period of 15 years.

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What is PPF?

PPF full form is Public Provident Fund, which is a government backed Saving Scheme. Many Indians invest in PPF and treat it as a retirement fund since it has a lock-in period of 15 years. Also it helps in saving income tax while claiming deductions under Section 80C (maximum deduction up to Rs. 1.5 Lacs in a financial year)

PPF Interest Calculator Video

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Features of PPF

  • PPF or Public Provident Fund is a savings scheme offered by the Government of India.
  • PPF has a lock-in period of 15 years
  • Minimum deposit amount in a FY to keep your PPF account active is Rs. 500
  • Maximum deposit amount for which you can earn interest in PPF account is Rs. 1,50,000
  • The interest on the account is paid by the government of India and is set every quarter, It is also tax-free.
  • PPF interest is calculated every month and is compounded annually
  • The applicable PPF interest rate for Jan 2023 to Mar 2023, has been fixed at 7.1% annually.
  • PPF or Public Provident Fund falls under EEE category (Exempt, Exempt, Exempt), which means, the Deposits, Interest and Maturity Amounts are all exempted from Income Tax
  • Partial withdrawals are allowed in PPF account
  • Loan facility is also available in PPF account

ALSO READ: Rs. 1000 PPF Interest Calculation for 15 Years

Opening a PPF Account

  • PPF accounts can be opened in post office, nationalized banks and major private banks such as ICICI and Axis. 
  • In several banks like ICICI and Axis, you can open a PPF account online through net banking as well. 
  • In case you are NRI (Non-resident of India), you cannot open a PPF account, but if you already had a PPF account before your became NRI, you can continue to hold PPF account until it’s maturity period
  • Once the account is opened, a PPF passbook similar to the bank passbook is issued. 
  • All transactions such as subscription, interest, withdrawals, etc. are recorded in this passbook. 
  • Some banks simply allow PPF entries or PPF balance to be viewed online instead of issuing a passbook.
  • You should remember that your amounts will be locked-in for 15 years in a PPF Account
  • You can only have one PPF account at a time. Multiple PPF accounts for same holder are not allowed

How much you can contribute to PPF

  • PPF accounts can be opened in post office, nationalized banks and major private banks such as ICICI and Axis. 
  • In several banks like ICICI and Axis, you can open a PPF account online through net banking as well. 
  • In case you are NRI (Non-resident of India), you cannot open a PPF account, but if you already had a PPF account before your became NRI, you can continue to hold PPF account until it’s maturity period
  • Once the account is opened, a PPF passbook similar to the bank passbook is issued. 
  • All transactions such as subscription, interest, withdrawals, etc. are recorded in this passbook. 
  • Some banks simply allow PPF entries or PPF balance to be viewed online instead of issuing a passbook.
  • You should remember that your amounts will be locked-in for 15 years in a PPF Account
  • You can only have one PPF account at a time. Multiple PPF accounts for same holder are not allowed

ALSO READ: PPF Interest Calculation for 20 years

How is PPF account interest calculated?

As I have mentioned earlier, PPF is a fixed income investment.

Interest on PPF is calculated monthly on the lowest PPF balance between the close of the fifth day and the last day of every month, that is. for the purpose of interest calculation, the amount that is deposited into the account before 5th of the month is considered.

So if any money is deposited after 5th day of a month, then no interest will be paid on that amount in the respective month.

Example

Here’s the screenshot of amount of Rs. 10,000 deposited in PPF account on or before 5th day of April:

Rs. 10,000 deposited in PPF BEFORE 5th day of April
Rs. 10,000 deposited in PPF BEFORE 5th day of April

As you can see in above image, we have selected the date as before 5th, in this case we get the interest amount calculated for that month itself (in the month of April)

Here’s another screenshot where the deposit date is after 5th day of April:

Rs. 10,000 deposited in PPF AFTER 5th day of April
Rs. 10,000 deposited in PPF AFTER 5th day of April

As you can see in above image, Rs. 10,000 deposited in PPF account after 5th day of April earns you interest from the month of May.

We have taken the example of the month of April, but this calculation process is applicable on all months in a Financial Year.

Hence it is advised that deposits should be made between 1st and 5th of the month to maximize your returns.

How to maximize PPF Interest?

Here’s another screenshot of amount of Rs. 1,50,000 deposited in month of April:

Rs. 1,50,000 deposited in PPF BEFORE 5th day of April
Rs. 1,50,000 deposited in PPF BEFORE 5th day of April

As we can see, we get interest of Rs. 10,650 on deposit of Rs. 1,50,000 in the month of April which is the start of Financial year. This is the maximum interest you can earn in 1st Financial year given the annual interest rate is fixed at 7.1% throughout the year.

Here’s the compounding case in PPF for above example where your PPF balance of Rs. 1,60,650 will be taken in 2nd Financial Year for PPF interest calculation:

Compounding example in PPF
Compounding example in PPF

Rs. 1,60,650 balance from 1st Financial Year is taken as the PPF balance in the 2nd Financial year. Also another deposit of Rs. 1,50,000 is made in 2nd Financial year to earn you more interest.

As you can see, you earn interest from the month of April onwards on your PPF balance (which is called compounding) and your deposit as well. This is the way to maximize interest in your PPF Account.

Maximize PPF Interest Video

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How much I get after 15 years in PPF?

You can easily calculate PPF interest using above online calculator.

How much you will get after 15 years of PPF account opening depends on your contributions to PPF account.

If you deposit Rs. 1.5 Lacs every year on or before 5th April, your total maturity amount after 15 years will be Rs. 39,44,600

Is PPF available for 5 years?

When you open a PPF account, there is a mandatory lock in period of 15 years, so you have to continue PPF account for 15 years. In case you want to deposit only for 5 years, than you should look for some other tax saving instruments like 5 year Fixed Deposits or ELSS (Equity Linked Saving Scheme)

After 15 years in PPF, you have the option to either close the account and take entire tax free maturity amount in your savings account, or to extend your PPF account for next 5 years, with or without deposits.

Extending PPF with a block of 5 years is one of the best solutions to earn more compounding interest in case you are not in a need of money for next 5 years.

PPF Calculator for 20 years

Since you can extend PPF with a block of 5 years, the question is how calculation works after 15 years of PPF lock in period? How to calculate PPF interest for 20 years.

So the PPF interest calculation process is same even after you extend your PPF account for next 5 years. You will be getting monthly interest on your PPF balance, and the interest for entire financial year will be added to you PPF account at the end of financial year (31st March).

You can use above PPF interest calculator to check you interest with existing PPF balance and the deposits you make. Also, you can use this PPF excel calculator in offline mode!

PPF Taxation and Exemption

Public Provident Fund falls under EEE regime of taxation.

This means that the Contributions to PPF account (up to Rs. 1.5 lacs per annum) is eligible for deduction under section 80C of Income Tax Act, interest earned is exempted and maturity amount is also exempted from tax.

The interest earned on the PPF account must be mentioned on the income tax return. These features of PPF Account makes this scheme very attractive.

ALSO READ: Home Loan Prepayment Reduce EMI or Tenure?

PPF partial Withdrawals

Partial withdrawals can be made after the expiry of 5 years after the year in which the account is opened.

For Example, if the account was opened on Jan 1, 2012, withdrawal can be made from the financial year 2017-18 onwards.

Only one partial withdrawal is allowed per financial year.

PPF Account Maturity

  • At the end of the lock-in period of 15 Years, you have following three options:
  • You can withdraw the PPF amount along with the interest earned. The entire maturity proceeds are exempt from tax.
  • You can extend the life of the PPF account indefinitely in blocks of 5 years at a time with contribution. You have to submit a request to extend the account, with further contributions by submitting Form H. The choice of extension with contribution has to be made within one year from the date of maturity, otherwise the default choice of extension without further contribution applies.
  • Extension of PPF without further contribution. You do not need to fill any form to choose this option.

Some more Reading:

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Income Tax Calculator App – FinCalC

For Income Tax Calculation on your mobile device, you can Download my Android App “FinCalC” which I have developed for you to make your income tax calculation easy.

What you can do with this mobile App?

  • Calculate Income Tax for new FY 2022-23 and previous FY 2021-22
  • Enter estimated Investments to check income tax with Old and New Tax Regime
  • Save income tax details and track regularly
  • Know how much to invest more to save income tax
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