PPF Calculator
Government backed tax-free savings
Govt. sets quarterly (~7.1%)
Min 15 years, extendable
Investment
80C deductible
Interest
Tax-free
Maturity
100% tax-free
| Year | Invested | Interest | Balance |
|---|
The Public Provident Fund (PPF) launched in 1968 remains India's most popular long-term savings instrument. With its unique EEE (Exempt-Exempt-Exempt) tax status, sovereign guarantee, and attractive interest rates, PPF has helped millions of Indians build a retirement corpus while saving taxes. Whether you're a salaried employee, business owner, or planning for your child's future, understanding PPF is essential for smart financial planning.
7.1%
Current interest rate
15 Years
Minimum lock-in period
₹1.5L/year
Maximum annual deposit
PPF interest is calculated monthly but credited annually on March 31st. The interest is applied on the lowest balance between 5th and last day of each month. This is why timing your deposits matters!
📅 Best Time to Deposit
Deposit before 5th of April to earn interest for the entire financial year. Even better: invest the full ₹1.5L lump sum on April 1st to maximize returns. A one-time April deposit earns more than 12 monthly deposits!
⚠️ Common Mistake
Depositing on 10th of month means zero interest for that month. Similarly, depositing in March earns interest for just 1 month. Plan ahead and deposit early!
Interest Calculation Example
Opening balance (April 1): ₹1,00,000
Deposit ₹10,000 on April 10: No interest for April!
Deposit ₹10,000 on April 3: Interest on ₹1,10,000 for full year
At 7.1%, that's ₹710 extra interest just by depositing 7 days earlier!
| Feature | PPF | ELSS | NPS | FD |
|---|---|---|---|---|
| Section 80C Benefit | ✓ (Up to ₹1.5L) | ✓ (Up to ₹1.5L) | ✓ Extra ₹50K | ✓ Only 5-year FD |
| Lock-in Period | 15 years | 3 years | Till 60 years | 5 years |
| Returns | 7.1% (guaranteed) | 12-15% (market) | 9-10% (market) | 6-7% (guaranteed) |
| Tax on Returns | None (EEE) | 10% above ₹1L | 40% taxable | Slab rate |
| Risk Level | Zero (Govt backed) | Medium-High | Medium | Low |
| Best For | Safe long-term | Tax saving + growth | Retirement | Short-term goals |
Smart Strategy: Max out PPF first (₹1.5L) for guaranteed tax-free returns, then invest remaining 80C limit in ELSS for higher growth. Use NPS for additional ₹50K benefit.
Opening Account (Year 0)
Open at any post office or authorized bank (SBI, ICICI, HDFC, PNB). Minimum deposit ₹500. One account per person (except minor child).
Contribution Phase (Years 1-15)
Deposit ₹500 to ₹1.5L per year. Min 1 deposit per year, max 12. Must contribute every year or account becomes inactive (revivable with ₹50 penalty).
Loan Facility (Years 3-6)
Can take loan against PPF balance from 3rd to 6th year. Max 25% of balance at end of 2nd year. Interest ~1% above PPF rate. Repay in 36 months.
Partial Withdrawal (Years 7-15)
From 7th year, withdraw 50% of balance at end of 4th year OR preceding year, whichever is lower. Only one withdrawal allowed per year.
Maturity & Extension (Year 15+)
Account matures after 15 years. Can withdraw full amount or extend in 5-year blocks. Extension can be with or without fresh contributions.
💰 Lump Sum vs Monthly
Winner: Lump Sum on April 1
₹1.5L on April 1 vs ₹12,500 monthly = ₹52,000+ extra over 15 years! If you have the money, invest early in the financial year.
👨👩👧 Family PPF Strategy
Open for Spouse + Kids
Husband, wife, and each minor child can have separate accounts. That's ₹4.5L/year (₹1.5L × 3) with full tax benefits!
🔄 Extend with Contribution
Continue After 15 Years
Each 5-year extension is a fresh opportunity. Continue contributing to enjoy tax-free growth for decades. Many wealthy Indians keep PPF active for 30+ years.
⚠️ Avoid These Mistakes
Common Errors
- • Missing yearly contribution (₹50 penalty)
- • Depositing after 5th of month
- • Withdrawing too early (loss of compounding)
- • Not extending after maturity
How many PPF accounts can one person have?
Only one PPF account per person is allowed (except for minor children where parents can open accounts in the child's name). Having multiple accounts in your own name is illegal and you must close extra accounts. However, a family of 4 (husband, wife, 2 children) can legally maintain 4 separate PPF accounts, investing up to ₹6 lakhs per year (₹1.5L × 4) with full tax benefits under Section 80C.
What happens if I don't invest in PPF for a year?
Your account becomes inactive (dormant) but continues earning interest. To reactivate, visit the bank/post office, pay ₹50 penalty per inactive year, and deposit the minimum ₹500. Important: You must make this deposit before March 31st to avoid account closure. Even when inactive, you cannot close the account before 15 years. Partial withdrawal from inactive accounts is allowed subject to rules.
Can I withdraw full PPF amount after 15 years?
Yes! After 15 years, you have three options: (1) Withdraw full amount and close account. (2) Extend without contribution - account stays active, earns interest, you can withdraw anytime. (3) Extend with contribution - continue investing ₹500-1.5L/year, enjoy 80C benefits. Many smart investors choose option 3 because PPF gives better tax-free returns than most alternatives. You can extend in 5-year blocks indefinitely.
Is PPF interest rate fixed or floating?
PPF interest rates are floating and revised quarterly by the government (announced in March, June, September, December). However, once interest is credited to your account (on March 31), it becomes fixed - the government cannot claw it back. Rates are linked to 10-year government bond yields and typically range between 7-8%. Historically, PPF rates have always beaten inflation, making it a real wealth preserver.
Can I transfer my PPF account to another bank?
Yes, PPF accounts are fully transferable between authorized banks and post offices. Visit your current branch, submit transfer request with new bank details. The process takes 1-2 weeks. Your account number stays the same, balance transfers completely. Many people transfer from post offices to banks for better online management. Some transfer from one bank to another for better service. Transfer is free - no charges applicable.
PPF is great for tax-free returns. Compare it with other long-term investment options: