Public Provident Fund (PPF) Calculator Online (2024)

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A PPF calculator is an online tool that helps you estimate the investment value of your monthly, quaertly or yearly Public Provident Fund (PPF) investment over a certain time period.

When you use a PPF calculator, it will simply apply the PPF calculation formula to calculate the total value of your investment after a certain number of years, given a certain PPF account interest rate.

PPF account calculator can also help you plan for retirement. PPFs have a 15-year lock-in period, which means PPF can be a great way to take a disciplined approach to invest for retirement. If you already have a retirement corpus in mind, you can look at how much you’ll need to invest over a certain period to achieve your retirement goal. However, note that the yearly contribution to a PPF account is capped at ₹1.5 lakh.

A PPF calculator in India requires just two inputs from you. When you open the ET Money PPF calculator, you’ll need to key in the annual contributions you expect to make over the next certain number of years, and the number of years for which you’ll continue contributing.

The PPF account interest rate is considered for change every quarter, and can be changed if the government believes a change is warranted. So, the calculator will also use the current interest rate offered on PPF automatically. As of October 2021, the rate is 7.1% per annum, so that’s what will be used for calculating your PPF returns and maturity value.

Once you have all inputs in place, you’ll automatically see the output. You’ll see the breakdown of the maturity value as the principal amount that you’d have invested and the returns you’d have generated over your investment tenure. The PPF calculator computes these numbers using the PPF calculation formula.

Using the online PPF calculator makes calculating your returns easy. However, there are several other benefits, as well. Following are some advantages:

• If you have a goal in mind, you can use the ET Money's PPF calculator to tweak the inputs to see how much you’ll need to contribute annually to achieve your goal.
• The PPF calculation formula is rather complex. You could commit an error while making computations manually. It can be particularly difficult if you want to see how your annual contributions impact the final value.
• Using a calculator could help you plan your taxes because once you know how much you’ll need to contribute annually, you’ll also know how much deduction you can claim each year u/s 80C of the Income Tax Act, 1961.

A Public Provident Fund calculator uses the same formula that’s used for calculating the future value of an annuity. In simpler words, it calculates the future value of your investment, based on the annual contribution you make towards the PPF and the prevailing PPF account interest rate. Following is the PPF calculation formula that a PPF return calculator uses:

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

Where:

• M = Maturity Value
• P = Annual Payments
• i = Interest Rate
• n = Number of years

The part after the P in the formula is the annuity factor, which when multiplied with the annual contribution, gives the maturity value of the PPF investment. Let’s use an example to calculate the maturity value of a PPF account with the following particulars:

Let’s plug the information into the PPF calculation formula:

M = ₹ 1 lakh [ ( { (1 + 7%) ^ 15 } - 1 ) / 7% ] x (1 + 0.07)
M = ₹ 27, 12, 139

If the interest rate changes, you’ll need to make the same calculation, but for different periods. For instance, if the rate was 7% for 5 years, and 8% for the next 5 years, you’d first calculate the maturity value for 10 years at 7% on the amount deposited during the first five years, and add it to the maturity value for 5 years at 8% on the amount deposited during the subsequent 5 years.

Please note that you can also set your PPF calculator to monthly contributions (i.e., yearly contributions ÷ 12). However, the result will be the same as when you set the calculator to yearly contributions.

Here are some key features of the Public Provident Fund:

Long-Term Investment: PPF is a long-term investment scheme with a maturity period of 15 years, which can be extended in blocks of 5 years after maturity.

Tax Benefits: Contributions made to a PPF account are eligible for tax deductions under Section 80C of the Income Tax Act in India. The interest earned on the PPF account is also tax-free.

Fixed Interest Rate: The government declares the interest rate for PPF accounts, and it is usually higher than the interest rates offered by regular savings accounts. The interest rate is typically revised every quarter, currently it is 7.1% per annum.

Lock-in Period: While the minimum investment period is 15 years, partial withdrawals are allowed from the 7th year onwards, subject to certain conditions and limits.

Loan Facility: PPF account holders can avail of loans against their PPF balance from the 3rd year to the 6th year of account opening.

Nomination: Account holders can nominate a beneficiary who will receive the accumulated funds in case of the account holder's demise.

Transferability: PPF accounts can be transferred from one authorized bank or post office to another, which offers flexibility to the account holder.

No Risk of Market Fluctuations: Unlike some other investment options, PPF carries no risk of market fluctuations as it is a government-backed scheme.

Retirement and Financial Security: PPF is often used as a means to save for retirement or for meeting long-term financial goals due to its safety and tax benefits.

You don’t need to pay any tax on the invested amount when you invest in PPF. You can use a PPF amount calculator to see how your maturity value differs over investment tenures. Of course, the greater the investment tenure, the larger your maturity value. To give you a sense of how much your investment tenure can impact your maturity value, here’s a table that shows PPF maturity values over different investment tenures:

Note: 7.1% is the current rate, and is subject to change in the future.