PPF Calculator

How PPF actually grows your money

The Public Provident Fund is a 15-year government-backed savings account. You deposit anything from ₹500 to ₹1,50,000 in a financial year, the government credits interest once a year, and that interest joins the principal — so next year's interest is earned on a bigger base. Nothing is taxed on the way in, on the way through, or on the way out. That combination is what people mean when they call PPF an EEE product, and it is the reason a modest yearly deposit ends up looking impressive after fifteen years.

This calculator assumes the deposit lands at the start of each year and compounds annually. In formula terms, each year's closing balance is (previous balance + deposit) x (1 + rate). Simple, and close enough to reality for planning — with the caveat covered further down about how the real monthly rule works.

Worked example: ₹1.5 lakh a year at 7.1% for 15 years

Take the maximum contribution and the rate applicable in 2026. Year one: you deposit ₹1,50,000, and the balance grows to ₹1,50,000 x 1.071 = ₹1,60,650. Year two: you add another ₹1,50,000 to give ₹3,10,650, which grows to ₹3,10,650 x 1.071 = ₹3,32,706. Two years in, you have put in ₹3,00,000 and earned ₹32,706 in interest, all of it tax-free.

Continue that for fifteen years and the maturity value lands at roughly ₹40,68,000 on a total investment of ₹22,50,000. Interest is about ₹18,18,000 — around 45% of the final corpus. That share is the whole story of compounding: in year one interest was 4% of the balance, by year fifteen it is nearly half.

Why the tax status matters more than the headline rate

A 7.1% tax-free return is not comparable to a 7.1% fixed deposit. Interest on a bank FD is added to your income and taxed at your slab rate. For someone in the 30% bracket, an FD needs to pay about 10.1% before tax to match PPF's 7.1% after tax. Very few AAA-rated instruments do that with zero credit risk, which is why PPF remains the default debt allocation for salaried investors in India even in years when the rate looks unexciting.

Against ELSS mutual funds the comparison flips in a different direction. ELSS carries a three-year lock-in rather than fifteen, and historically higher returns, but with equity volatility and 12.5% long-term capital gains tax above the annual exemption. The usual advice is not to pick one — PPF anchors the debt side of an 80C allocation while ELSS supplies the growth side.

One planning note for the new tax regime: Section 80C deductions are not available there, so the deduction argument for PPF disappears. The tax-free interest and tax-free maturity remain, which still makes PPF competitive with taxable debt products even without the upfront deduction.

The rate is not fixed for 15 years

This is the most common misunderstanding. The PPF rate is notified quarterly by the Ministry of Finance and applies to everyone's balance, old and new. It has been as high as 12% in the 1980s, sat at 8% for much of the 2000s, was 8% as recently as 2018-19, and has held at 7.1% since April 2020 — the longest unchanged stretch in the scheme's history. Any calculator, including this one, projects a single rate forward because nobody knows the future schedule. Treat the maturity figure as a scenario, not a promise, and rerun it at 6.5% and 7.5% to see the range you are actually living in.

On the same ₹1.5 lakh yearly deposit over 15 years, 6.5% gives about ₹38.6 lakh and 7.5% about ₹42.1 lakh. A one-point spread in the rate moves the outcome by roughly ₹3.5 lakh, which is worth knowing before you build a goal around the exact number.

Deposit timing changes the result too

Real PPF interest is calculated each month on the lowest balance between the 5th and the last day of that month. Deposit before the 5th of April and the money earns interest for all twelve months; deposit on the 31st of March and it earns almost nothing that year. Over fifteen years, depositing on 1 April rather than 31 March is worth well over ₹1 lakh on a full contribution. This calculator assumes the good habit — deposit early in the financial year.

Extensions: the underrated part of the scheme

At maturity you have three choices. Withdraw everything, extend for five years with contributions, or extend for five years without contributions. The default if you do nothing is extension without contributions — the balance keeps earning the notified rate and you may withdraw any amount once per year, but you cannot deposit again, and a deposit made by mistake earns no interest.

Extending with contributions requires Form 4 within one year of maturity and keeps the ₹1.5 lakh limit and the 80C benefit alive. During such an extension you can withdraw up to 60% of the balance held at the start of the five-year block, spread over the block. Extending twice takes a 15-year account to 25 years, and that is where the arithmetic gets dramatic: the same ₹1.5 lakh yearly deposit reaches around ₹40.7 lakh at 15 years, ₹66.6 lakh at 20 years and roughly ₹1.03 crore at 25 years. The final ten years add more than the first fifteen did.

Limitations worth knowing before you commit

The lock-in is genuine. Partial withdrawals only start in the seventh year, capped at 50% of an older balance, and premature closure after five years costs 1% of all interest credited. A loan is available in years three to six at one point above the PPF rate, which is cheap, but capped at 25% of a two-year-old balance. If you might need the money within a decade, PPF is the wrong container for it.

The ₹1.5 lakh cap is per person and shared across all your 80C investments, and you may hold only one PPF account. Accounts opened for a minor child count against the guardian's limit. NRIs cannot open new accounts, though an account opened while resident can run to maturity. And the numbers here are estimates: your bank or post office statement is the authority, and nothing on this page is investment or tax advice.