PPF Calculator

PPF Calculator

If you have any query related to the Public Provident Fund or PPF then Investkraft’s PPF calculator is the most efficient tool you will find on the internet. PPF is ideal for new employees or parents who wish to procure guaranteed, risk-free and substantial returns on their investments for the future.

If you are planning to invest in PPF but are uncertain about how much to invest or what returns you might get, our PPF calculator can help. By using a PPF calculator, you can gain a clear understanding of the future value of your PPF investments. This will enable you to make informed financial decisions and plan your savings more effectively.

How Does a PPF Work?

A Public Provident Fund (PPF) account can be opened by an adult for themselves or on behalf of a minor. The account tenure is 15 years and the lock-in period for the account is also 15 years.

One can make deposits to a PPF account ranging from Rs.500 up to Rs.1.5 lakh per financial year. Deposits can be made in a lump sum or installments, with no restriction on the number of installments per financial year. Deposits must be made every financial year during the tenure, and such deposits are exempt from income tax under section 80C.

To keep the PPF account active, a minimum deposit of Rs.500 per financial year is required. Failure to make this deposit will result in the account being discontinued. A penalty of Rs.50, along with a minimum deposit of Rs.500, will have to be paid to reactivate the account. An interest rate of 7.1% p.a. (as of Q1 FY2024-25) is applied to the deposit and is compounded annually. A loan facility is available on the PPF balance.

Additionally, partial and premature withdrawals on the PPF account are allowed, subject to certain conditions. After completing the tenure, one can choose to extend the account with or without making additional contributions. Finally, the account can also be closed.

Let us understand the PPF maturity amount calculator and how it works with the help of an example below.

PPF Maturity Amount Calculator Formula

M = P [ ( { (1 + i) ^ n } - 1 ) / i ]

Where,

• M = Maturity benefit
• P = Annual installments
• i = Interest rate
• n = Number of years

Suppose Anil decides to contribute INR 1000 per financial year to his PPF account for 15 years. With the current PPF interest rate at 7.1%, let us calculate the maturity amount he will receive at the end of his tenure.

M = 1000 [ ( { (1 + 7.1) ^ 15 } - 1 ) / 7.1 ]

M = INR 27,000 (approximately)

How to Use the PPF Calculator to Calculate the Maturity Amount?

The PPF calculator of Investkraft is a very simple tool that can calculate your investment’s maturity amount with only a couple of details. Here is how you can use our calculator:

1. Select or enter a yearly investment amount
2. Enter the current PPF rate of interest
3. Choose a period
4. Click on the “Invest Now” button

What are the Benefits of Investing in a PPF Account?

Listed below are all the benefits of investing in a PPF account:

• Tax-Free Investment: PPF accounts offer tax benefits. Investments made in PPF qualify for tax deductions under Section 80C of the Income Tax Act, up to a maximum limit of Rs.1.5 lakh per financial year. Interest earned on PPF investments is tax-free.
• Secure Investment Option: PPF is a government-backed scheme that guarantees both the principal amount invested and the interest earned, making it a highly secure investment option with minimal risk.
• Long-term Savings: PPF is an excellent long-term savings tool with a 15-year lock-in period, allowing investors to build a sizable corpus for retirement or other financial goals while benefiting from compounding.
• Better Interest Rates than FDs: PPF offers competitive interest rates compared to other fixed-income investment options like fixed deposits. The interest rate on PPF is determined by the government and is subject to change every quarter.
• Loan Facility: Account holders can apply for a loan in Form-2 after one year of initial subscription but before five years. The loan amount cannot exceed 25% of the credited amount in the second year preceding the year of the loan application.
• 50% Balance Withdrawal Allowed: Account holders can withdraw up to 50% of their balance after five years from account opening. Withdrawal can be made once a year from accounts that are not discontinued.
• Account Extension Opportunity: After the initial 15-year lock-in period, PPF accounts can be extended indefinitely in 5-year blocks, with or without additional contributions.
• Nomination Facility After Demise: PPF account holders can nominate individuals to receive the account proceeds after their death, avoiding lengthy legal procedures.
• Lumpsum/Flexi Investment Options: Investors can deposit Rs. 500-1.5 lakh/year in lump-sum or installments, offering flexibility to manage savings and investments as per their financial goals.
• Wide Availability: PPF accounts are widely accessible and available at post offices and various public and private banks across India.