PPF Calculator
The Public Provident Fund runs for 15 years, compounds annually and pays out entirely tax free. This shows what your yearly contribution becomes, and what extending the account does to that number.
Why PPF is unusual
PPF sits in what tax people call the exempt exempt exempt category. Your deposit qualifies for a deduction under section 80C in the old regime, the interest accrues without being taxed, and the maturity amount is tax free when you withdraw it. Very few things in India work that way.
That last point is what people undervalue. A fixed deposit at 7.1 percent returns roughly 4.97 percent after tax if you are in the 30 percent bracket. PPF at 7.1 percent returns 7.1 percent. To match it, a taxable investment would need to earn a little over 10 percent before tax.
A worked example
Deposit the full ₹1,50,000 every year for 15 years at 7.1 percent. You put in ₹22,50,000. The maturity value is roughly ₹40,68,000, so about ₹18,18,000 is interest, and you receive all of it without paying a rupee of tax.
The extension, which is where it gets interesting
At the end of 15 years you can extend in blocks of 5 years, either continuing to deposit or leaving the balance to keep earning. Because compounding is at its most powerful on a large balance, these later blocks do a great deal of work.
Continue the same ₹1,50,000 a year and the picture looks like this.
| Term | You deposit | Maturity value |
|---|---|---|
| 15 years | ₹22,50,000 | about ₹40,68,000 |
| 20 years | ₹30,00,000 | about ₹66,58,000 |
| 25 years | ₹37,50,000 | about ₹1,03,08,000 |
| 30 years | ₹45,00,000 | about ₹1,54,50,000 |
The last five years alone, from 25 to 30, add roughly ₹51,42,900 against ₹7,50,000 of deposits. Nothing changed except that the balance was already large. That is compounding doing what it does, and it is the reason people who open a PPF in their twenties and simply keep extending it end up with figures that look implausible.
Rules worth knowing
- Deposit before the 5th of the month. Interest is calculated on the lowest balance between the 5th and the last day of each month. A deposit on the 6th earns nothing that month.
- Deposit early in the financial year. A lump sum in April earns a full year of interest. The same amount in March earns almost none.
- The ₹1,50,000 cap is across all your PPF accounts including any you hold for a minor.
- Partial withdrawal is allowed from the seventh year, subject to limits. Loans against the balance are available between the third and sixth year.
- Miss a year and the account goes dormant. Reviving it costs a small penalty plus the minimum deposit for each missed year.
The honest limitation
Two things constrain PPF. The ₹1,50,000 annual cap means it cannot be your whole plan if you save more than that. And the rate is reset quarterly by the government, so today's 7.1 percent is not guaranteed for 15 years. It has been higher in the past and it may be lower in future. Enter a rate you consider realistic rather than assuming the current one holds forever.
Common questions
Is PPF interest really tax free?
Yes. Interest accrues tax free and the maturity amount is tax free. The contribution also qualifies under section 80C if you use the old regime. This combination is rare and it is the main reason PPF holds up against higher yielding but taxable alternatives.
What is the current PPF interest rate?
The rate is set by the government and reviewed every quarter, so it changes. Check the current notified rate and enter it above rather than relying on the default value.
Can I withdraw before 15 years?
Partial withdrawal is permitted from the seventh year, capped at a proportion of the balance. Full premature closure is allowed only in limited situations such as serious illness or higher education, and it carries an interest penalty. Treat PPF as genuinely locked up.
When should I make the deposit each year?
As early in the financial year as you can manage, and before the 5th of the month in any case. Interest is computed on the lowest balance between the 5th and the month end, so timing genuinely changes your return.
Can I have more than one PPF account?
One in your own name. You may also operate one on behalf of a minor child, but the ₹1,50,000 annual limit applies to the total across all of them, not to each separately.
Is PPF better than ELSS?
They serve different purposes. PPF is a guaranteed, tax free return with a 15 year lock in. ELSS is market linked with a 3 year lock in, higher expected return and real risk of loss. Both qualify under 80C. Many people hold both, using PPF for the safe portion and ELSS for the growth portion.