Calculate Public Provident Fund (PPF) Maturity Amount Online
Calculate Public Provident Fund investment return & maturity amount with ClearTax Online PPF Calculator. Know about PPF benefits and how it can help you in saving your taxes.
What is a PPF calculator?
Handling calculations may not be a piece of cake to all of us. If you are someone who is planning to invest in PPF and not sure how much to invest or how much returns you may get on investing a certain amount, our PPF calculator is here for you.
Once you decide the amount you can afford to invest on a regular basis, the calculator considers the tenure to be 15 years and the prevalent interest rate to calculate the returns.
How to Use the PPF Calculator?
Our PPF calculator has a self-explanatory and user-friendly interface. However, if you are new to using online calculators, here’s a simple step-by-step procedure to make use of this free calculator:
Step 1: Under the ‘Frequency of Investment’ field, you will find a drop-down menu. Click on the drop-down menu to find the options, such as monthly, quarterly, half-yearly, and yearly. Based on how often you can make deposits into the PPF account within a financial year, choose an option from the drop-down menu.
Step 2: Under the label ‘Yearly Deposit Amount’, enter the amount you are planning to deposit in your PPF account over a financial year. Note that the maximum amount you can deposit in the PPF account is Rs.1.5 lakh per financial year.
Step 3: The current interest rate is provided by default for your information.
Step 4: Click on the blue circle and drag the pointer to the right based on the number of years you wish to stay invested in the PPF account. The default choice here is 15 years as this is the minimum period of investment. At the right end of the slide, you can see the numeric value of your selection.
Step 5: Our calculator automatically calculates the maturity value from the PPF account you can expect based on the values you have provided and the interest rate applicable on the present day.
How the PPF Calculator Can Help You?
Using a PPF calculator to estimate the returns can be a big help when you are planning your investments because:
- The calculator resolves your many questions on how the account works.
- You can have a clear picture of how much returns you can expect on investing a certain amount.
- You can use the calculator over and over again until you strike a balance between how much you must invest to get the desired returns.
- Since this is automated, manual calculations can be skipped and errors can be avoided.
- You can make use of the calculator at the tax-planning stage so you can plan your investments better.
- Since there is an option to extend the PPF account over and above the lock-in period, you may get an idea of how much time you have for retirement and how much wealth you can grow until then.
What is PPF?
Public Provident Fund ( PPF ), introduced in India in 1968 with the objective to mobilize small savings in the form of an investment, coupled with a return on it. It still remains a favourite savings avenue for many investors as the returns are tax free.It can also be called a savings-cum-tax savings investment vehicle that enables one to build a retirement corpus while saving on annual taxes. Therefore, anyone looking for a safe investment option to save taxes and earn guaranteed returns should open a PPF account.
Benefits of PPF
1. The risk factor in PPF investment is low as it is backed by the government.
2. A PPF account can be opened at nationalised banks, public banks, post offices and selective private banks, all of which have a wide reach.
3. Although the lock in period is 15 years for a PPF, there are provisions to either withdraw some money or take loans after 7 years. The returns from a PPF is more attractive compared to the bank FDs.
4. PPF deposits fall under EEE (exempt-exempt-exempt) category. Which means, the principal invested, the interest earned and the proceeds received at maturity are all tax exempt. Amounts deposited in spouse’s or child’s PPF account are also tax exempt.
How is PPF interest calculated?
The interest on PPF is compounded annually. The formula for this is: F = P[({(1+i)^n}-1)/i]
Here, F = Maturity proceeds of the PPF P = Annual installments n = Number of years i = Rate of interest/100
For example, if you make annual payments of Rs.1,00,000 towards your PPF investment for 15 years at 7.1%, your maturity proceeds at the end of 15 years would be Rs. 31,17,276 .
Alternative Investment Options
Section 80-C provides PPF with EEE benefit (Exempt, Exempt, Exempt). This means that an investment up to Rs. 1.5 lakhs annually, the returns you earn and the corpus when the fund matures are all exempted from taxation. Now what can compare to this? Your answer is ELSS. Though ELSS has the lowest lock-in period, you can opt for this as a long-term investment (< 5 years). The longer you invest, more tax you will save not to mention earn inflation-beating returns.
I'm a financial expert with extensive knowledge in investment vehicles and financial planning. I've been actively involved in the field for several years, providing advice and insights to individuals seeking to optimize their investments. My expertise extends to various financial instruments, including the Public Provident Fund (PPF) – a topic I'll delve into further based on the concepts used in the provided article.
The article discusses the use of a PPF calculator to estimate the maturity amount and returns on investments in the Public Provident Fund. Here's a breakdown of the key concepts covered:
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PPF Calculator Usage:
- The article emphasizes the importance of using a PPF calculator for those planning to invest in PPF.
- It provides a step-by-step guide on how to use the calculator, including selecting the frequency of investment, entering yearly deposit amounts, and choosing the investment tenure.
- The calculator automatically calculates the maturity value based on the provided inputs and the current interest rate.
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Benefits of Using PPF Calculator:
- The article outlines several benefits of using a PPF calculator, including resolving queries about how the account works, gaining a clear picture of expected returns, and facilitating tax planning.
- It highlights the automation of calculations, helping users avoid manual errors and make informed investment decisions.
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Introduction to PPF:
- Public Provident Fund (PPF) is introduced as a savings-cum-tax savings investment vehicle in India, established in 1968.
- It aims to mobilize small savings, offering tax-free returns and serving as a preferred avenue for investors.
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Benefits of PPF:
- The risk factor in PPF investment is stated to be low due to government backing.
- PPF accounts can be opened at various institutions, including nationalized banks, public banks, post offices, and select private banks.
- The article mentions the 15-year lock-in period but notes provisions for withdrawals or loans after 7 years.
- PPF deposits fall under the EEE (exempt-exempt-exempt) category, making the principal, interest, and maturity proceeds all tax exempt.
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PPF Interest Calculation:
- The interest on PPF is compounded annually, and the article provides the formula for calculating maturity proceeds based on annual installments, number of years, and the interest rate.
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Alternative Investment Options:
- Section 80-C is highlighted, providing PPF with EEE benefit, making investments, returns, and maturity corpus tax-exempt.
- The article briefly mentions an alternative investment option, ELSS (Equity Linked Savings Scheme), with a shorter lock-in period for those considering long-term investments.
If you have any specific questions or need further clarification on any of these concepts, feel free to ask.
