PPF Calculator
Break-up of Maturity Amount
PPF calculator – Calculate Public Provident Fund Returns and Interest Amount
PPF calculator is an easy-to-use tool that helps you calculate the maturity amount of the Public Provided Fund and total interest accumulated over time. Lock in period of PPF is 15 years and the current interest rate is 7.1%, compounded annually.
How can PPF Calculator help you?
PPF online calculator can help in several ways
- This calculator makes it easy to know the maturity amount of your invested amount along with interest.
- It helps in financial planning by comparing the different sum of money and their maturity amounts.
- The calculator gives accurate results within a fraction of a second.
What is PPF?
Public Provident Fund (PPF) is a Government backed small saving scheme, which helps in building retirement corpus by giving decent returns and helps in saving taxes. The amount is locked for 15 years but can be extended in blocks of 5 years. The minimum investment in PPF is Rs. 500 and the maximum is Rs. 150000 per year, investment can be made in a lump sum or a maximum of 12 installments per year.
PPF provides guaranteed risk-free returns and falls under EEE status, meaning that the amount invested, interest earned and maturity amount received are tax-free.
How does the PPF Account calculator work?
The maturity amount in PPF is calculated in PPF calculated by using the below formula.
F = P [({(1+i) ^n}-1)/i]
Where,
F = Maturity amount of PPF
P = Annual Installment
i = rate of Interest
n = Total number of years
PPF Account calculator is an easy-to-use online tool that answers your queries quickly. Just input the annual investment you wish to make and you get your maturity amount and the total interest earned.
Example: Let’s take an example of an investor who invests Rs. 100000 every year. Now the interest earned and the final maturity amount will depend upon the interest applicable for that year. The current rate of interest is 7.1%, compounded annually. The below table shows how the PPF calculator works.
- Investment every year: Rs. 100000
- Interest rate: 7.1%
How much wealth can we make with PPF?
Wealth creation with PPF majorly depends upon the amount you invest every year and the prevailing rate of interest. From the table below, we get a fair idea of how much wealth we can make for different yearly investments at an annual interest rate of 7.1%.
PPF Interest Rate for 2022 -2023
The Government fixes the rate of interest of the PPF account. The current rate of interest is 7.1%. The interest is calculated monthly and credited to the PPF account at the end of each financial year is 31st march. The below table shows the history of PPF interest rates in India
PPF Interest Rate History
PPF Account Key Features
Before you arrive at the decision of investing in the Public Provident Fund it’s important to know about this scheme in detail. It’s a long-term commitment and requires financial discipline. You should also take into consideration your situation, capacity, and need.
Advantages and Disadvantages of PPF
Public Provident Fund comes with its own advantages and disadvantages. So before making any investment in PPF one should be aware of its advantages and disadvantages. Below is a snapshot of the same.
How to open a PPF account?
PPF account opening is an easy process. You need to submit an application form along with KYC, address proof, identity proof, and signature proof. You can open a PPF Account either in Post Office or any Nationalized or Private Sector Bank. There is a lock-in period of 15 years. But there is an option to withdraw money after completing 6 years.
Below self-attested documents are required to open a PPF Account
- PPF Account application form, available offline and online
- ID Proof: Aadhaar, PAN card, Passport, Driving License, or Voter ID
- Address Proof: Aadhaar, Electricity Bill, Telephone Bill, Ration Card
- 2 Passport size Photographs
- Age Proof in case of minor (Birth Certificate)
- Signed cheque in favor of the Bank or pay-in slip to transfer the amount
Which Banks provide PPF accounts?
Post Offices and many Nationalized and Private Sector banks provide PPF accounts with offline and online facilities. Below is the list of the banks which provide PPF account facilities.
What are the alternatives to PPF?
Investment into a PPF account may not suit everyone. It is better suited to people who intend to accumulate wealth for their retirement. It is also a safe and risk-free investment as it is backed by the Central Government. Most people opt for PPF for tax-saving purposes, but there are also other options available that can be looked into. The below table gives a fair idea of PPF vs other alternatives.
How to take PPF Loan?
Public Provident Fund comes with the added advantage of a loan facility. A subscriber in difficult times can look for PPF loan. The details of the PPF loan are as under.
How to withdraw money from PPF?
PPF comes with a flexibility of amount withdrawal starting from the 7th financial year. The withdrawal details can be seen in the below table.
PPF vs ELSS: Which one is better?
The PPF is backed by the Government of India and its current interest rate is 7.1%. When we factor the inflation, the return is much lower. PPF is a good option for risk-averse investors. But risk lovers who want better returns and also tax-saving ELSS can be a much better option. Returns from ELSS funds are market-linked and hence there are no assured returns. The historical average return of ELSS has been around 12%. The below example can be an eye-opener.
Example:
Let’s take the example of Ram and Sham, who have invested Rs.1.5 lakh in PPF and ELSS respectively. The investment period is 15 years and the rate of inflation is 5%.
Conclusion
PPF is not for everyone. It can be the best investment option for only those who want guaranteed returns without any risk. It’s a good investment for those people who want to save tax or want to accumulate wealth for their retirement. PPF is tax efficient and falls under EEE and the status of 80C. Your invested amount, interest, and the final maturity amount is tax-free. PPF offers flexibility in deposits along with a loan facility.
But for those who are looking for higher returns and are ready to take risks, there are better options available in the market like ELSS, ULIP, etc. The comparison has been made in the above table.
Frequently Asked Questions
How PPF Interest is calculated?
The interest rate for PPF is reviewed every quarter. The interest is compounded annually for PPF. PPF deposits can be made in a lump sum or every month. The interest is calculated every month but credited to the account at the end of the year on the 31st of March. The interest is calculated on the minimum balance left in the account between the 5th and end of each month. Investors can take advantage of this by investing in PPF before the 5th of every month. The deposits made before the 5th will earn interest in that month.
What is the minimum amount required to invest in PPF?
The minimum investment amount you can invest in PPF is Rs 500.
How much I will get in PPF after 15 years?
The maturity amount will depend on how much you have invested and the interest rate. Please refer table above
Can NRI Invest in PPF?
As per the recent notification by the Government of India, NRIs will not be able to open the new Public Provident Fund (PPF) account. However, they can hold an existing PPF account till maturity. Now, NRIs will also get the same interest rate on PPF as resident Indians.
Can I open 2 PPF accounts?
No, you cannot open multiple accounts. There can be only one PPF account per subscriber. But you can open a PPF account in your minor child’s name.
Can I transfer the PPF account to another branch or office?
Yes, you can transfer the PPF account from one branch of the post office to another or from one branch of a bank to another. You can visit your branch of the bank or post office and submit an application to change the branch. This process can take from one to seven days.
Can I terminate the PPF account before maturity?
No, there is a lock-in period of 15 years for the PPF account. After the completion of 15 years, the maturity amount will be paid. In case of emergency, you can withdraw partially after the completion of 6 years. The withdrawal is allowed up to 50% of the total balance at the end of the 4th financial year immediately preceding the year of withdrawal OR the total balance at the end of the financial immediately preceding the year of withdrawal whichever is lower.
What happens if PPF is not paid?
If you miss paying the minimum amount of Rs 500 in any financial year, your account will become inactive. To activate this account, you will have to pay a penalty of Rs 50 and make a deposit for the years you have missed paying the deposit. After that, your account will start earning interest again.
Can I invest in PPF Online?
Yes, you can invest in PPF online. Just visit the website of the bank or Post office and apply online.