PPF Calculator

What is Public Provident Fund (PPF)?

The Public Provident Fund (PPF) is a long-term, government-backed savings scheme introduced in India in 1968. It offers guaranteed, tax-free returns determined by the Ministry of Finance and reviewed quarterly. PPF combines sovereign safety, reasonable returns and unmatched tax benefits — making it a cornerstone of retirement planning for millions of Indians. Compare it with our FD Calculator or NPS Calculator to find the right mix for your retirement plan.

How is PPF Maturity Calculated?

PPF uses annual compounding. Each year, interest is calculated on the sum of the opening balance and that year's contribution, then added to the corpus. The formula is: A = P × [((1+r)ⁿ – 1) / r] × (1+r), where P is the yearly deposit, r is 7.1% and n is the number of years. Because interest compounds on an ever-growing balance, the growth accelerates dramatically in the later years.

PPF EEE Tax Advantage Explained

• First E — Exempt at contribution: Deposits up to ₹1.5 lakh/year are deductible under Section 80C, reducing your taxable income.
• Second E — Exempt on interest: The 7.1% interest earned every year is completely tax-free, unlike FD interest which is taxed at your slab rate.
• Third E — Exempt at maturity: The entire corpus you receive at the end of 15+ years — principal plus all accumulated interest — is 100% tax-free.

PPF vs Fixed Deposit — Which is Better?

PPF currently earns 7.1% p.a. fully tax-free. An FD at 7.5% p.a. for a 30% tax bracket investor yields an effective post-tax return of only 5.25%. This makes PPF significantly more rewarding on an after-tax basis for most investors. However, FD offers more flexibility — no lock-in, premature withdrawal allowed with penalty, and tenures as short as 7 days. PPF is better for long-term tax-free wealth building; FD is better for short-term or liquid savings. Compare FD returns using our FD Calculator.

PPF Withdrawal and Loan Rules

• Partial withdrawal (from Year 7): You can withdraw up to 50% of the balance at the end of Year 4 or the preceding year, whichever is lower. Only one withdrawal per financial year is allowed.
• Loan facility (Year 3 to Year 6): A loan of up to 25% of the balance at the end of the 2nd year preceding the loan year is available at just 1% above the PPF rate.
• Premature closure: Allowed only after 5 years in specific cases — treatment of a life-threatening disease, higher education of account holder or minor child, or change of residency to non-resident status. A 1% interest penalty applies.
• Full withdrawal at maturity: After 15 years, you can withdraw the entire corpus tax-free, or extend for 5-year blocks with or without contributions.

Tips to Maximise PPF Returns

• Invest before 5th April every year. PPF interest is calculated on the minimum balance between the 5th and last day of each month. Depositing before 5th April ensures you earn interest for the full financial year.
• Max out the ₹1.5 lakh limit. Using the full annual limit gives the highest corpus and maximum 80C tax saving simultaneously.
• Extend beyond 15 years. Extending with contributions for another 5-year block accelerates wealth creation dramatically — the interest in the final years is the largest because compounding acts on the biggest base.
• Start early for your children. A guardian can open a PPF account in a minor child's name, effectively giving the family double the tax-free savings capacity.

✓Verified by ToollyX Team · Last updated June 2026