How the PPF calculator works
Enter the amount you will deposit each year (up to ₹1,50,000) and the number of years — 15 for the basic term, or longer if you plan to extend. The calculator assumes each deposit is made at the start of the financial year, adds a year of interest at the chosen rate, and carries the balance forward. The table shows how the balance grows and how much of it is interest.
PPF interest is calculated monthly on the lowest balance between the 5th and the last day of the month, and credited to the account at the end of the financial year. That is why deposits made on or before the 5th earn interest for that month, while deposits after the 5th earn nothing until the next month. For the maximum benefit, deposit the full amount by 5 April each year.
The rate you enter should be the one currently notified. Since the rate can change every quarter, re-run the calculator when a new rate is announced.
PPF formula with variable key
Formula
M = D × [((1 + i)^n − 1) / i] × (1 + i)
- Where:
- M
- = maturity amount at the end of the term
- D
- = yearly deposit (assumed at the start of each year, by 5 April)
- i
- = annual interest rate as a decimal (0.071 for 7.1%)
- n
- = number of years (15 for the initial term)
This is the same annuity-due formula used for SIPs, applied yearly instead of monthly. Deposits made later in the year or in instalments earn slightly less than the formula shows.
Worked example in rupees
Meera deposits ₹1,50,000 on 3 April every year for 15 years. Assume the rate stays at 7.1% throughout.
- Total deposited = ₹1,50,000 × 15 = ₹22,50,000
- Year 1 closing balance = ₹1,50,000 × 1.071 = ₹1,60,650
- Year 2 closing balance = (₹1,60,650 + ₹1,50,000) × 1.071 = ₹3,32,706
- Maturity after 15 years ≈ ₹40,68,209
- Total interest earned ≈ ₹18,18,209 — entirely tax-free
Had she deposited ₹1,00,000 a year instead, maturity would be about ₹27,12,139; at ₹50,000 a year, about ₹13,56,070. Extending the account for two 5-year blocks to 25 years at the same deposit and rate would take the balance to roughly ₹1.03 crore.
Comparison: PPF at 7.1% vs an equity SIP at an assumed 12%
| PPF (7.1%) | Equity SIP (12% assumed) | |
|---|---|---|
| Amount invested | ₹22,50,000 | ₹22,50,000 |
| Estimated value | ₹40,68,209 | ₹63,07,200 |
| Return guaranteed? | Rate set by government each quarter | No — market-linked |
| Tax on gains | Nil (EEE) | LTCG 12.5% above ₹1.25 lakh a year |
| Liquidity | Restricted; partial withdrawal from year 7 | Open-ended; redeem any time |
The comparison is not about which is better in isolation. PPF gives a safe, tax-free core; an equity SIP offers higher potential growth with risk. Many households use PPF for the debt portion of long-term goals and SIPs for the equity portion.
This illustration assumes a constant 12% a year, assumed for this example; it is not a forecast. For reference, AMFI Best Practices Circular No. 109/2023-24 prescribes 12.93% for equity-fund illustrations: the mean of 10-year rolling returns of the Nifty 50 between 01/06/2013 and 30/05/2023 (Sensex 12.64%, 10-year G-Sec 7.20%). Calculators accept rates up to 13%.
Past performance may or may not be sustained in future and is not a guarantee of any future returns.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
Tax implications and common mistakes
- EEE status: the deposit qualifies for Section 80C (old regime only, within the ₹1.5 lakh cap), the interest is exempt and the maturity is exempt. Under the new regime the 80C deduction is not available, but the interest and maturity remain tax-free.
- Depositing after the 5th: money credited on the 6th or later earns no interest for that month. A lump sum on 5 April earns for the whole year; twelve monthly deposits earn less.
- Exceeding ₹1.5 lakh: deposits beyond the annual limit earn no interest and are not eligible for deduction.
- Missing the minimum deposit: an account with no deposit in a year becomes inactive and must be revived with the prescribed fee — check the current rule.
- Expecting a fixed rate for 15 years: the rate is reviewed quarterly. It was 7.1% for July–September 2026; check the current rate before relying on a maturity figure.
- Ignoring liquidity: partial withdrawals are allowed only from the seventh year onward and loans in specific years, both within limits — check the current rules before counting on PPF for emergencies.
Frequently asked questions
What is the PPF interest rate for 2026?
The government sets PPF interest every quarter. For July–September 2026 it is 7.1% per annum, compounded annually. Check the current rate at your bank or post office before planning.
How is PPF interest calculated?
Interest is calculated each month on the lowest balance between the 5th and the end of the month, and credited at the end of the financial year. Deposits made by the 5th earn interest for that month.
What is the maximum I can deposit in PPF?
₹1,50,000 per financial year across all PPF accounts you hold (including a minor's account you operate). Deposits above this earn no interest.
Is PPF maturity taxable?
No. PPF has exempt-exempt-exempt (EEE) status: the deposit qualifies for 80C under the old regime, and both the interest and maturity amount are tax-free.
Can I extend PPF after 15 years?
Yes. After maturity the account can be extended in blocks of five years, with or without further deposits, by submitting the extension form within the prescribed time. Check the current procedure with your bank or post office.
Can I withdraw from PPF before maturity?
Partial withdrawals are permitted from the seventh financial year onward, subject to limits, and loans are available in earlier years. Premature closure is allowed only in specific circumstances. Check the current rules.
Is PPF better than a mutual fund SIP?
They serve different roles. PPF offers a government-set rate with no market risk and tax-free returns; equity SIPs offer higher potential growth with market risk. The right mix depends on your goal and horizon.
Does the 80C deduction apply under the new tax regime?
No. Section 80C is available only under the old regime. Interest and maturity remain tax-free under both regimes.
Can I open a PPF account for my child?
Yes, a parent or guardian can open and operate a PPF account for a minor. The combined ₹1.5 lakh limit applies to your own and the minor's account together.
What happens if I deposit on the 10th of the month?
That deposit earns no interest for that month; interest starts from the next month. Over 15 years this small timing difference adds up, so aim for the 5th or earlier.
Does Two Plus Two Nine open PPF accounts?
No. PPF accounts are opened at post offices and authorised banks. We are an AMFI-registered Mutual Fund Distributor and can explain how PPF fits alongside mutual fund investing.