Public Provident Fund (PPF) Calculator
Calculate Your PPF Maturity Amount
What is Public Provident Fund (PPF)?
The Public Provident Fund (PPF) is a long-term savings scheme established by the Government of India. It offers an attractive interest rate, and the deposits made in the PPF account are eligible for tax benefits under Section 80C of the Income Tax Act. The scheme has a minimum tenure of 15 years, making it a great option for long-term financial planning.
How Does the PPF Calculator Work?
The PPF Calculator helps you estimate the maturity amount of your Public Provident Fund investment based on the following parameters:
- Annual Deposit Amount: The amount you plan to deposit annually into your PPF account.
- Current Interest Rate: The annual interest rate offered by the government on PPF (subject to change each quarter).
- Investment Period: The period for which you plan to keep the investment (minimum 15 years).
The calculator uses the compound interest formula to estimate the maturity amount:
Formula:
Future Value = P × [(1 + r/n)^(nt) - 1] / (r/n)
Where:
- P = Principal amount (annual deposit)
- r = Annual interest rate (decimal)
- n = Number of times interest applied per time period (typically once per year)
- t = Time the money is invested for, in years
Benefits of Investing in Public Provident Fund (PPF)
- Guaranteed Returns: PPF offers guaranteed returns as it is backed by the government, making it a safe investment option.
- Tax Benefits: Deposits made under PPF are eligible for tax deductions under Section 80C of the Income Tax Act. The interest earned and the maturity amount are also tax-free.
- Long-Term Financial Security: PPF is ideal for long-term financial goals such as retirement, education, and wealth accumulation due to its 15-year lock-in period.
Frequently Asked Questions (FAQ)
1. What is the minimum and maximum deposit amount for PPF?
The minimum deposit amount for PPF is ₹500 per year, and the maximum deposit allowed is ₹1.5 lakh per year.
2. Can I withdraw money from my PPF account before maturity?
Partial withdrawals are allowed from the 7th financial year onwards. You can withdraw up to 50% of the balance at the end of the 4th year or the year before the withdrawal, whichever is lower. Full withdrawal is only allowed at maturity.
3. Can I extend my PPF account after maturity?
Yes, you can extend your PPF account in blocks of 5 years after the initial 15-year period. During the extension period, you can continue to make deposits and earn interest.
4. How is the interest rate on PPF determined?
The interest rate on PPF is determined by the government and is subject to change every quarter. The current interest rate can be checked at any Post Office or online through the official government portals.