Many viewers on my YouTube Channel ask questions about how to calculate PPF Interest, is there any PPF Calculator Excel, can they open PPF account in banks like SBI, HDFC or ICICI and what is the latest interest rate? All these questions will be answered in this article.
PPF (Public Provident Fund) is one of the attractive government-backed saving scheme for the people of India that helps in retirement planning and Income Tax saving. The latest interest rate between October to December 2023 is 7.1%. PPF Calculator in Excel helps us in calculating accurate interest including annual compounding. You can download PPF calculator in excel using below form.
- PPF Calculator Excel Download
- PPF Calculator Excel Video
- Features of PPF
- Opening a PPF Account
- Contributions that you can make in PPF
- PPF Interest Calculation
- Taxability & Exemption
- PPF Partial Withdrawals
- Maturity of PPF Account
- Frequently Asked Questions (FAQs)
- Can I maintain more than 1 Public Provident Fund (PPF) account under my name?
- What happens if I fail to deposit any amount in one or more Financial Years in PPF account?
- When does a Public Provident Fund (PPF) account mature?
- Can I extend the tenure of a Public Provident Fund (PPF) investment beyond the Maturity Period?
- Can I withdraw funds from my Public Provident Fund (PPF) Account?
- Can I avail of Loan facility on my Public Provident Fund (PPF) investment?
PPF Calculator Excel Download
Fill below form to download PPF Calculator in Excel:
Watch below video to understand how to use PPF Excel calculator and calculate monthly interest in PPF.
PPF Calculator Excel Video
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 October to December 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
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
Income Tax Calculation FY 2023-24 Video
Contributions that you can make in PPF
- Minimum contributions you should make in a PPF Account to keep the Account active is Rs. 500 in a Financial year.
- The maximum amount you can contribute to earn Tax-free interest in a Financial Year is Rs. 1.5 Lacs.
- Update: You can make any number of deposit transactions in PPF in a Financial Year
- The contributions made towards PPF Account also help you in Saving your Income Tax, by claiming the Investments under Section 80C.
- You can check PPF balance online anytime
PPF Interest Calculation
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.
Here’s the screenshot of amount of Rs. 10,000 deposited in PPF account on or 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:
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:
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:
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.
PPF maximum Interest Video using Excel
In this video, I have explained you every combination of deposits you can make in PPF to maximize interest in PPF account.
Additionally, you can DOWNLOAD my Free Android App FinCalC, to see how Interest is calculated on PPF.
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Taxability & 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.
How to Save Income Tax Video
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.
Maturity of PPF Account
- 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:
- Rs. 1000 SIP vs RD Calculation
- Best Post Office Schemes with High Returns
- What is Superannuation Fund and Benefits
Frequently Asked Questions (FAQs)
Can I maintain more than 1 Public Provident Fund (PPF) account under my name?
Only one PPF account can be maintained by an Individual, except an account that is opened on behalf of a minor.
What happens if I fail to deposit any amount in one or more Financial Years in PPF account?
A penalty of Rs. 50 will be levied per year of default, if the customer doesn’t deposit the minimum deposit amount of Rs. 500 on the completion of the financial year.
When does a Public Provident Fund (PPF) account mature?
A Public Provident Fund (PPF) account gets matured after the completion of 15 years from the end of the year in which the account was opened.
Can I extend the tenure of a Public Provident Fund (PPF) investment beyond the Maturity Period?
A customer can extend the tenure of a Public Provident Fund (PPF) investment for a block period of 5 years beyond the maturity period by submitting Form H within one year from the date of maturity.
Can I withdraw funds from my Public Provident Fund (PPF) Account?
Customer can make one withdrawal every year, from the 7th financial year, of an amount that does not exceed 50% of the balance of the customer credit at the end of the fourth year immediately preceding the year of withdrawal or the amount at the end of the preceding year, whichever is lower.
Can I avail of Loan facility on my Public Provident Fund (PPF) investment?
Customers can avail of the loan facility between third financial year to sixth financial year ie. from third financial year up to end of fifth financial year in a PPF Account.
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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 2023-24 and previous FY 2022-23
- 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
- More calculators including PPF, SIP returns, Savings account interest and lot more
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