Public Provident Fund (PPF) Calculator

Anyone from employed to self-employed can invest in this savings scheme and ensure a safe retirement for themselves. Public Provident Fund (PPF) is one of the best long-term investment options that also offer you tax benefits.

PPF investments are not only safe but also offer a good rate of return to investors. You can use the PPF calculator to estimate your saving needs as per the need of your retirement corpus. PPF Calculator helps you compute how much the principal invested amount will be at maturity and returns on your PPF account.

PPF scheme was drafted by National Savings Institute and launched by the Government of India in April 1968. The scheme was rescinded in 2019 and replaced by the new Public Provident Fund Scheme 2019. The new scheme offers more flexibility for investors and brings PPF features at par with similar long-term investments.

PPF calculator is a simple online tool which makes your investment planning efforts with PPF easier. You can use the PPF interest calculator to estimate how much you can save. If you are trying to save for a specific goal, you can also use the PPF account calculator to estimate the monthly savings for the PPF account.

The PPF calculator usually calculates for a tenure of 15 years or more.

1. Select the Investment Amount

This is the amount you wish to invest in your PPF account. You can input a monthly, quarterly, semi-annual or annual amount. Also, ensure that your investment amount does not exceed Rs 1.5 lakhs a year or Rs 12,500 p.m.

2. Select Investment Tenure

This is the time you will continue your PPF investment. The minimum time available is 15 years, and you can extend the term in batches of 5 years after that. The PPF calculator assumes that you will be investing the same amount until maturity.

3. Select PPF Interest Rate

The ongoing interest rate of PPF is automatically selected in the PPF calculator.

4. Check the Future Value

You can click on the calculate button once you have input all the values if the calculator does not show you the maturity value at the end. You can change the investment amount to increase or decrease the maturity.

• PPF Calculator helps you resolve queries related to Public Provident Fund account. PPF Calculator also monitors the growth of your invested capital. This becomes crucial because interest rate changes on monthly basis for PPF savings account. With the help of PPF Calculator, it is easier for account holders to find out monthly changes in PPF account interest rates.
• The PPF calculator helps you simplify your investments in PPF. The tool gives you a picture of what your investments will yield after maturity. You can use the information from the PPF calculator to plan your investments better.
• For example, if the current PPF investment is not enough to achieve your goals you may need to increase the contribution. Once you reach the maximum limit in PPF you can start looking for other investment options for better allocation.
• PPF calculator also helps you compare your other investments with PPF returns.

The PPF interest calculator uses the following formula to estimate your PPF value :

PPF Value = Pmt * [((1+i/nper)^(n*nper) – 1) / (i/nper)]

Where, Pmt is your regular payments

nper is the number of payments per year (i.e. nper = 12 in the case of monthly investments)

i is the annual rate of return on PPF

n is the number of years of investment

For example, if you invest Rs 10,000 p.m. in your PPF account for 10 years and the rate of interest has been 8% the variables will be:

Pmt. = 10,000

nper = 12

i = 8%

n = 10

PPF value after 10 years = Rs 18.3 lakhs

You need to understand the meaning of your PPF calculator estimates in the context of PPF benefits and features. Here’s how you can interpret all the values of the PPF calculator:

• Opening PPF Balance :

  The progress in PPF is counted in financial years. Opening balance is the amount of money you have in the PPF account at the beginning of the financial year, i.e., 1st to 5th April of the year.

• Deposited Amount :

  This is the money you will or have invested throughout the financial year in the PPF account.

• Interest Earned :

  This is the amount your deposits and PPF balance have earned in the financial year.

• Closing PPF Balance :

  The closing balance in a PPF account is the balance on the final day of the financial year, i.e., on 31st March.

• Loan Balance :

  For the first five years (full financial years) withdrawals are not available from the PPF account. But you can borrow out of the balance after the third year of account opening. The balance available for borrowing is 25% of the account balance in the previous financial year of the borrowing year.

• Withdrawals from PPF :

  You can withdraw part of the PPF balance starting the seventh financial year. Your maximum withdrawal has to be the lower of the following two amounts:

  50% of the closing balance in the immediately previous financial year

  50% of the closing balance four years before the withdrawal year

The maturity value or fund value estimated by the calculator automatically assumes that you had not made any partial withdrawals during this time.

You need to calculate different amounts based on PPF rules. Considering the different needs for estimating PPF interest, maturity value, withdrawals, etc. you can use the following six types of PPF calculators:

PPF calculator simplifies the PPF calculations for you so that you can easily estimate your maturity, withdrawal limits and investment needs in PPF. PPF calculator offers the following advantages to you:

• Clearly shows the growth of your investments over the years.
• Helps you plan your investments better. That is whether to increase or decrease your contributions depending on how close you are to your investment goals.
• Saves time in complex annuity calculations.
• Maximise your tax savings with advance estimates of your savings.
• Decide whether to continue PPF investments for an extended period.

The government of India, more accurately the Ministry of Finance is responsible for deciding the PPF interest rate. The rates are announced every quarter. The current rate of interest for Quarter 2 of the FY 2022-23 is 7.1% p.a.

The interest in PPF accounts is compounded annually. This means that interest will continue to accrue on your account balance for the remaining months of the financial year after a deposit. The accrued interest is added to the principal and reinvested at the end of the financial year.

PPF interest is calculated on the minimum balance between the 5th day and the last day of the month. The interest rate for the PPF calculation will be the one announced for the quarter. You can maximise your returns for the year by depositing the maximum amount between the 1st to 5th of April of every financial year.

If you deposit Rs 10,000 every month in your PPF account, the interest calculation will be as given below:

1. When you invest the money between the 1st and 5th day of the month.

Note that the accrued interest is not added back to the account balance until the end of the financial year. That is due to the annual compounding of interest in PPF.

So, while the interest rate can vary from quarter to quarter the accrued interest throughout the financial year will start earning interest only in the next financial year.

Although PPF accounts are popular and safe investments in India offering total tax exemption, you have multiple alternatives as well. PPF is one of those investments with exempt investment, exempt interest and exempt maturity values. The following investments fall into the same category: