Annual Investment Amount

Time Period (in years)
Rate of interest

%

## Public Provident Fund or PPF Calculator

Risk-free investments are everyone’s favourite and one of the most popular risk-free investments in India is PPF or Public Provident Fund. In this article, we will discuss the PPF calculator and its features, benefits and other details. We will also discuss the PPF scheme in detail to assist you in your investment decision.

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## What is PPF Calculator?

Public Provident Fund Calculator or PPF Calculator is one of the many financial calculators which are used nowadays for asserting the maturity value of your PPF investment. This calculator helps in calculating how much you can accumulate through your investment in the PPF scheme over a certain period.

## How PPF Calculator Works?

Like other financial calculators, the PPF return calculator also needs certain inputs from the user based on which, the calculator provides the answers. This calculator uses the formulae we use manually for calculating returns of PPF, however, it does it quickly and accurately as manually calculating returns of PPF account takes a lot of time and effort.

## Public Provident Fund Calculation Formula

The formulae used by the ppf interest calculator is the one that you use for deriving the future value of any annuity scheme. Since the PPF scheme has a fixed interest rate and also a lock-in period of 15 years, the calculation of the maturity depends on these two factors along with the amount invested yearly in the PPF account. The formulae used for calculating the maturity amount of the PPF account are as follows –

Maturity Amount: P {([(1+i) ^n]-1)/i} X (1+i)

Here,

• P

Annual investment in the PPF account

• N

number of years which is at least 15 years

• I

interest rate on PPF account

icon

Suppose, you started investing in a PPF account and yearly you invest Rs. 1 lakh in the same. The current interest rate on the PPF account is 7.1% and the tenure is 15 years.

###### So, the maturity amount of PPF account = P {([(1+i) ^n]-1)/i} x (1+i) = Rs. 100000 {([(1+7.1%) ^15]-1)/7.1%} x (1+0.071) = Rs. 2712139

PPF return calculator can help you in calculating the accurate amount that you will be able to save over the tenure. The PPF interest calculator can help you keep track of your investment and you can understand how much it has grown at a certain period after investing. You can also change the interest rate when the government changes it for the PPF scheme and recalculate how much you can accumulate with your PPF investment. The PPF calculator can make your life easier when you are a PPF account holder or thinking about opening a PPF account.

## How to Calculate Expected Returns from PPF??

The expected return from the PPF account can be calculated using the Public Provident Fund calculator. If you take the above example and the formula given above for PPF and then calculate, the process would look like this -

Amount Deposited Total Investment Interest Balance At the End of the Year
100000 100000 7100 107100
100000 207100 14704.1 221804.1
100000 321804.1 22848.0911 344652.1911
100000 444652.1911 31570.30557 476222.4967
100000 576222.4967 40911.79726 617134.2939
100000 717134.2939 50916.53487 768050.8288
100000 868050.8288 61631.60884 929682.4376
100000 1029682.438 73107.45307 1102789.891
100000 1202789.891 85398.08224 1288187.973
100000 1388187.973 98561.34608 1486749.319
100000 1586749.319 112659.2017 1699408.521
100000 1799408.521 127758.005 1927166.526
100000 2027166.526 143928.8233 2171095.349
100000 2271095.349 161247.7698 2432343.119
100000 2532343.119 179796.3614 2712139.48

So, this is how the PPF calculation works but it takes a lot of time when you do it manually, while with the PPF calculator, it takes hardly a minute only.

## Advantages of using a Public Provident Fund Calculator

So, now you know how the PPF interest calculator works, and the formula that is actually behind the same, let’s see the benefits of using this calculator –

• This online tool for PPF calculation helps in calculating estimated PPF returns in no time. Once you enter the variables like investment amount, tenure for investment and interest rate (usually fixed as per the current rate of interest on PPF), the calculator will instantly offer you the results. You do not have to wait or check your mail for the results.

• By using the PPF account calculator, you can understand how much you can save over the tenure you will be investing in the scheme, you can compare with other investment options and take a wise decision. So, it helps in the investment decision-making process as well.

• If you have a financial goal, and you want to see how much you need to invest in the PPF account for achieving that, you can use the PPF return calculator for determining how much you need to invest in the scheme. This will again help in the financial decision-making process and help you achieve your goals.

• PPF calculation is quite complex as you can see in the table above. It takes a lot of time and effort to manually calculate the returns for each year and then finally the maturity amount. Thus, with the PPF interest rate calculator you do not have to spend so much time and don’t have to worry about accuracy as well.

## Benefits of Investing in the PPF Scheme

While the above points are the benefits of using a PPF calculator, are you aware of the benefits of a PPF account or have you considered why you should open a PPF account? If not then here are some of the reasons you need to know –

PPF Scheme is a risk-free investment scheme offering guaranteed returns. This is a government-backed investment scheme, so you can be assured of your capital investment as well as the returns. However, the interest rate may vary and thus there can be changes in the returns too.

You can open a PPF account in the post office, bank, or private banks, - both online and offline. Thus, you do not have to stand in long queues for PPF account opening, it is completely hassle-free.

You can start withdrawing from your PPF account (up to a certain limit) from the 7thyear into the investment. However, the investment in the amount needs to be continued for 15 years necessarily.

You get tax exemption up to Rs. 1.5 lakhs for your PPF investment in a financial year under section 80C of the Income Tax Act. The investment is tax-exempted, and so is the interest earned and also the maturity amount. It is one of the few investment instruments which falls under the EEE category of tax exemption. EEE stands for Exempt-Exempt-Exempt which means investment, interest and proceeds all are tax exempted.

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## PPF Investment Schedule

PPF scheme has a lock-in period of 15 years, but here the meaning of lock-in is a little different. So, if you start investing in the PPF scheme, you have to continue the same for at least 15 years which is the minimum tenure. Then you can increase the tenure by five years at a time, as a block of five years and you can do it any number of times. Here is the detailed schedule of the PPF Scheme as per the above example –

Amount Deposited Total Investment Interest Balance At the End of the Year
100000 100000 7100 107100
100000 207100 14704.1 221804.1
100000 321804.1 22848.0911 344652.1911
100000 444652.1911 31570.30557 476222.4967
100000 576222.4967 40911.79726 617134.2939
100000 717134.2939 50916.53487 768050.8288
100000 868050.8288 61631.60884 929682.4376
100000 1029682.438 73107.45307 1102789.891
100000 1202789.891 85398.08224 1288187.973
100000 1388187.973 98561.34608 1486749.319
100000 1586749.319 112659.2017 1699408.521
100000 1799408.521 127758.005 1927166.526
100000 2027166.526 143928.8233 2171095.349
100000 2271095.349 161247.7698 2432343.119
100000 2532343.119 179796.3614 2712139.48
• You can start availing loan on your PPF account from the 3rd year and you can avail of up to 25% of the balance at the end of the 3rd year. You can avail of the loan for up to 6th year.
• Withdrawal starts from the 7th year and you can partially withdraw from your PPF account.
• After the 15th year, you have 3 options –

• You can fully close the account and withdraw the entire accumulated sum
• You can extend the account for five years without many any deposits and the sum remaining in your account will keep on earning interest
• You can extend the account and make fresh deposits even after 15 years, however, the new deposits will not earn any interest and the old deposits, or to be specific, the amount accumulated till the end of the 15th year will earn interest.

## PPF Interest Rate

The PPF interest rate depends on the 10-years government bond yield and it is currently 7.1%. The government decides the interest rate on the PPF account. When the interest rate is changed, both existing and new PPF accounts are affected by the change in the rate of interest. In this scenario, you can use the PPF calculator by dividing the tenure when the interest rate was the same. Suppose, the rate changed twice within 15 years, after the 5thyear and after the 11th year. So, you have to calculate the for the first 5 years, then again calculate it for 6 years with the new interest rate and then the last four years with the latest interest rate and then sum up all three results.

### How to open a PPF account?

If you want to open a PPF account, you can visit the bank where you have your account or you can visit any post office as well. There you have to fill out the PPF account opening form and submit your details along with your documents for KYC purposes and then you have to deposit the amount you want to deposit in the account. You can also open a PPF account nowadays online without visiting any banks or post offices physically.

### How to withdraw money from PPF?

Similar to account opening, you can withdraw from your PPF account by visiting the branch where you have your PPF account. You have to fill out and submit the withdrawal application from your PPF account and once they process the application, the funds will be transferred to your bank account which is linked to the PPF account.

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### How to use the PPF calculator?

You need to open the PPF calculator online and then select the amount you want to deposit, and then choose the tenure and the compounding frequency. The provident fund calculator will provide the results.

### Is the PPF calculator free?

Yes, PPF calculators are free to use. You can use them from your mobile phone, laptop, or any other similar device. You do not have to log in or anything, just visit the site and use the public provident fund calculator.

### How many times can I use the PPF calculator?

You can use the PPF interest rate calculator as many times as you want. There is no cap on the number of times of using the PPF calculator.

### Disclaimer

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