The Public Provident Fund (PPF) is a government-backed savings scheme with a 15-year lock-in. Its rate is set by the Government of India every quarter, the money is fully safe, and the interest is tax-free. That makes PPF a favourite for long-term goals like retirement and children's education.
Key PPF rules
- Deposit: minimum ₹500 and maximum ₹1,50,000 per financial year.
- Tenure: 15 financial years, which you can extend in blocks of 5 years, with or without fresh deposits.
- Interest: compounded yearly and credited at the end of each financial year.
- Tax: deposits qualify for a deduction under the old tax regime (Section 80C), and the interest and maturity amount are tax-free.
- Withdrawals: partial withdrawals are allowed from the 7th financial year, and loans are available between the 3rd and 6th years.
How to use the PPF calculator
- Enter your yearly investment (up to ₹1,50,000).
- Check the interest rate. The default is 7.1%, but the government revises it every quarter.
- Choose the time period: 15 years, or more if you plan to extend.
The year-wise breakdown shows your deposit, interest and balance for every year.
PPF formula
F = P × [((1 + i)^n − 1) ÷ i] × (1 + i)- F = maturity value
- P = yearly deposit
- i = yearly interest rate ÷ 100
- n = number of years
The formula assumes you deposit at the start of each financial year, which is what earns the most interest.
Example
You deposit ₹1,50,000 every year for 15 years at 7.1%.
- Total invested = ₹22,50,000
- Total interest = ₹18,18,209
- Maturity value = ₹40,68,209, all tax-free
If you extend and keep depositing for 20 years, the balance grows to about ₹66,58,288. At 25 years it crosses ₹1 crore.
Maturity for different yearly deposits
15 years at 7.1%:
| Yearly deposit | Total invested | Maturity value |
|---|---|---|
| ₹50,000 | ₹7,50,000 | ₹13,56,070 |
| ₹1,00,000 | ₹15,00,000 | ₹27,12,139 |
| ₹1,50,000 | ₹22,50,000 | ₹40,68,209 |
Tip: deposit before the 5th
PPF interest for each month is calculated on the lowest balance between the 5th and the last day of that month. Deposit before the 5th of the month, and ideally before 5 April for the whole year, to earn the maximum interest.
FAQ
What is the current PPF interest rate?
The government reviews the PPF rate every quarter. The calculator uses 7.1% by default. Check the latest rate on the India Post or National Savings Institute website and enter it in the calculator.
Can I invest more than ₹1.5 lakh in PPF?
No. The limit is ₹1,50,000 per financial year across all your PPF deposits. Any excess amount does not earn interest and is not eligible for the tax deduction.
What happens after 15 years?
You can close the account and withdraw the full amount, or extend it in blocks of 5 years. During an extension you may continue deposits or simply let the balance keep earning interest.
Is PPF better than an FD?
PPF interest is tax-free and the money is backed by the government, which usually makes its after-tax return better than an FD for people in higher tax brackets. The trade-off is the long lock-in. Compare with the FD calculator.