PPF Calculator (Public Provident Fund)

The Public Provident Fund is a government-backed, long-term savings scheme popular for its "EEE" tax status — your contribution, the interest earned, and the maturity amount are all exempt from tax. It comes with a mandatory lock-in of 15 years, after which it can be extended indefinitely in blocks of 5 years, with or without further contributions.

How interest is calculated: PPF interest is computed monthly on the lowest balance between the 5th and last day of the month, but credited to your account at the end of the financial year. For simplicity, this calculator assumes the full yearly contribution is made at the start of the financial year and compounds annually — this represents the maximum possible benefit and is close to actual returns if you deposit early each year.

Why depositing before the 5th of the month matters: because interest is calculated on the lowest balance between the 5th and the last day of each month, a deposit made on the 6th or later effectively earns no interest for that entire month — it's treated as if it wasn't in the account until the following month's calculation window. Depositing your annual lump sum (or monthly installment) before the 5th of April each year, rather than later in the year, maximizes the actual interest you earn relative to what this calculator's simplified annual model shows.

Contribution limits: You can invest a minimum of ₹500 and a maximum of ₹1,50,000 in a PPF account per financial year, and this combined limit applies across all your PPF accounts (self plus any minor accounts you operate). Contributions above ₹1,50,000 do not earn interest and are not eligible for tax deduction.

Worked example: depositing ₹1,50,000 every year for 15 years at 7.1% p.a. compounded annually grows to approximately ₹40.68 lakh, of which your own contribution is ₹22.5 lakh and the rest, about ₹18.18 lakh, is interest — entirely tax-free.

A second example — extending beyond 15 years: the same ₹1,50,000/year continued for a 5-year extension block (20 years total) grows to roughly ₹63.4 lakh at the same 7.1% rate — illustrating why many PPF holders choose to extend rather than close the account at the 15-year mark, since the compounding benefit accelerates the longer the account stays open.

PPF also offers partial withdrawal facility from the 7th financial year onward and a loan facility between the 3rd and 6th year, making it more liquid than it first appears despite the long lock-in.

1. Depositing after the 5th of the month. As covered above, a late deposit misses that entire month's interest calculation window — depositing before the 5th, especially for the April lump sum, maximizes actual interest earned.

2. Exceeding the ₹1,50,000 annual limit across accounts. The limit applies combined across your own account and any minor accounts you operate — contributions beyond this earn no interest and aren't eligible for the 80C deduction, so track your total contributions carefully if you manage multiple PPF accounts.

3. Forgetting to submit the extension form. If you want to continue contributing after the initial 15-year term, you must submit Form H (the extension-with-contribution form) within one year of maturity — missing this deadline converts your account to a without-contribution extension by default.

4. Choosing the New Tax Regime and still expecting the 80C deduction. Section 80C, which covers PPF contributions, is only available under the Old Tax Regime — under the New Regime, the PPF interest and maturity remain tax-free, but the contribution itself gets no upfront deduction.

5. Treating PPF as fully illiquid. Many people avoid PPF assuming the money is locked for 15 years with no access at all, missing that partial withdrawal is allowed from year 7 and a loan facility exists between years 3-6 — useful to know before ruling PPF out for a goal that might need partial access.