What is a Public Provident Fund (PPF) account?

The Public Provident Fund (PPF) is a long-term, government-backed small savings scheme in India with a 15-year lock-in period. It offers a fixed interest rate notified by the Government of India every quarter, tax deduction on contributions under Section 80C, and tax-free interest and maturity proceeds (EEE status).

How is PPF interest calculated?

PPF interest is calculated on the lowest balance between the 5th and the last day of each month, at the government-notified annual interest rate. Interest is compounded annually and credited at the end of the financial year. To maximise interest, you should deposit before the 5th of each month or as a lump sum at the start of the financial year.

What is the minimum and maximum amount I can invest in PPF?

Currently, the minimum contribution to a PPF account is ₹500 per financial year and the maximum is ₹1.5 lakh per financial year per person across all PPF accounts. You can make up to 12 deposits in a year, but the total of all deposits cannot exceed the annual limit.

When can I take a loan against my PPF balance?

You can take a loan against your PPF account from the 3rd financial year up to the end of the 6th financial year. The maximum loan amount is generally 25% of the balance at the end of the second year immediately preceding the year in which the loan is applied. The loan must usually be repaid within 36 months and carries an interest rate higher than the PPF interest rate.

When are partial withdrawals from PPF allowed?

Partial withdrawals are allowed from the 7th financial year onwards, subject to limits. Typically, you can withdraw up to 50% of the balance at the end of the 4th year immediately preceding the year of withdrawal or the balance at the end of the previous year, whichever is lower. Exact rules can change, so always check the latest government notification or your bank/post office.

Can I extend my PPF account beyond 15 years?

Yes. After the initial 15-year maturity, you can extend your PPF account in blocks of 5 years, with or without further contributions. If you wish to continue contributing, you must submit a written request (Form H or equivalent) within one year from the date of maturity. During extension, the account continues to earn the prevailing PPF interest rate.

What is PPF? Calculator for Maturity Amount, Interest, Limits & Loan Facility (India)

What is PPF and why is it popular?

The Public Provident Fund (PPF) is a long‑term, government‑backed small savings scheme in India. It is designed to help individuals build a retirement corpus while enjoying attractive, tax‑efficient returns.

Issuer: Government of India (sovereign guarantee)
Tenure: 15 years (extendable in 5‑year blocks)
Interest: Fixed rate notified every quarter (e.g. 7.1% p.a.)
Tax treatment: EEE – Exempt on contribution (Section 80C), interest and maturity
Risk: Very low (backed by Government of India)

How PPF interest is actually calculated

PPF interest is not simply calculated on your year‑end balance. The rules are slightly more nuanced:

Interest is calculated monthly on the lowest balance between the 5th and the last day of each month.
The interest for all 12 months is then compounded annually and credited at the end of the financial year.
Deposits made on or before the 5th of a month earn interest for that month; deposits after the 5th do not.

Our calculator approximates this behaviour using your chosen deposit timing assumption (start, middle or end of period) and shows you a clear year‑wise schedule.

PPF interest formula (simplified annual compounding)

If you invest a fixed amount \( P \) every year at interest rate \( r \) for \( n \) years, the maturity value is:

\[ \text{Maturity} = P \times \frac{(1 + r)^n - 1}{r} \]

In reality, PPF uses monthly interest on daily balances, but this annuity formula gives a close approximation for regular yearly deposits.

PPF contribution limits and rules (quick reference)

Minimum contribution: ₹500 per financial year.
Maximum contribution: ₹1.5 lakh per financial year per individual (across all PPF accounts in your name).
Number of deposits: Up to 12 deposits per year (monthly or irregular), but total must not exceed the annual limit.
Who can open: Resident individuals (one account per person). NRIs cannot open new PPF accounts.
Joint accounts: Not allowed; however, you can open accounts in the name of minor children as guardian (limits still apply per PAN/individual).

Loan and partial withdrawal facility in PPF

Loan against PPF balance

Available from the 3rd financial year up to the end of the 6th financial year.
Maximum loan amount is usually 25% of the balance at the end of the second year immediately preceding the year of loan.
Loan must typically be repaid within 36 months.
Loan interest rate is PPF rate + a spread (e.g. +1%); check latest rules with your bank/post office.

Partial withdrawals

Allowed from the 7th financial year onwards.
Withdrawal limit is usually up to 50% of the lower of:
- Balance at the end of the 4th year immediately preceding the year of withdrawal, or
- Balance at the end of the previous year.
Only one partial withdrawal is typically allowed per financial year.

PPF vs other tax‑saving options

PPF competes with other Section 80C and tax‑saving products such as:

ELSS mutual funds: Higher return potential but market risk; 3‑year lock‑in.
Tax‑saving FDs: 5‑year lock‑in; interest is taxable.
EPF/NPS: Employer‑linked or pension‑oriented products with their own rules.

PPF is often preferred by conservative investors who want guaranteed, tax‑free returns and are comfortable with a long lock‑in.

Worked example: Can PPF make you a crorepati?

Assume:

Yearly contribution: ₹1.5 lakh
Interest rate: 7.1% p.a. (constant)
Tenure: 30 years (15 years + 3 extensions of 5 years each)

Using the calculator with yearly contributions at the start of each year:

Total invested: ₹45,00,000
Maturity amount: typically well above ₹1 crore (depending on exact rate and timing)

This illustrates why PPF is often recommended as a core, low‑risk component of a long‑term retirement plan.

FAQs about PPF

Is PPF completely tax‑free?

Yes, PPF currently enjoys EEE status in India:

Exempt on investment: Contributions up to ₹1.5 lakh per year qualify for deduction under Section 80C.
Exempt on interest: Interest credited to your PPF account is not taxed.
Exempt on maturity: The final maturity amount is also tax‑free.

Can I close my PPF account before 15 years?

Premature closure is allowed only under specific conditions (e.g. serious illness, higher education, change of residency status) and usually after 5 years, with a penalty on the interest rate. Always check the latest scheme rules before deciding.

How often does the PPF interest rate change?

The Ministry of Finance reviews and notifies the PPF interest rate every quarter. Our calculator lets you input the current rate, but your actual long‑term return will depend on how rates move over time.

Disclaimer: This calculator is for educational and planning purposes only. PPF rules, limits and interest rates are subject to change by the Government of India. Always verify current rules with official notifications, your bank, or a qualified financial advisor before making investment decisions.

PPF Calculator – Maturity Amount, Interest, Limits & FAQs (India)

Public Provident Fund (PPF) Calculator

Projected outcome

Year‑wise PPF balance & interest schedule