Loan (Max.)*: Loan Amount refers to the loan on PPF that can be availed at the beginning of the year.
Withdrawal (Max.)**: Withdrawal Amount refers to the PPF balance that can be withdrawn at the start of the year.
Public Provident Fund (PPF) is one of the most popular government-backed saving schemes in India. Launched by the government to benefit small-savers, PPF offers guaranteed returns along with tax benefits as it falls under the Exempt-Exempt-Exempt (EEE) category.
If you are investing in PPF, you would like to know how much your money would grow during the investment tenure. However, the actual calculations can be difficult. A PPF Calculator comes in handy in this situation. Using the PPF Calculator, you can easily calculate the year-wise PPF returns you can earn by contributing to your PPF account over a pre-determined period and with a specific frequency. Since interest rate, maturity, taxation and withdrawal rules are set by the government, there is no need for separate bank-wise calculators such as SBI PPF Calculator, PNB PPF Calculator, India Post PPF Calculator, HDFC PPF Calculator, etc.
How to use PPF Calculator?
To use the PPF calculator correctly, you will need to provide the following data:
Tenure of the PPF account – Minimum 15 years to max 50 years with an option of extension in blocks of 5 years.
Deposit/Payment Frequency – This can be chosen as monthly, quarterly, half-yearly and annually. In case of quarterly deposits made every quarter, half-yearly deposits mean twice each year and so on.
Deposit Amount – This amount is to be deposited in the account as per the deposit frequency. Thus if the deposit amount is Rs. 1,000 and Deposit Frequency is monthly, total PPF deposit for the year will be Rs. 12,000 and automatically calculated by the PPF calculator.
Interest Rate – This is the PPF rate of return that you are expecting on your investment.
Once you have provided the above data into the PPF calculator, just click on “Calculate” to get instant information about PPF maturity amount, PPF Interest earned, total PPF investment and much more.
Basic Rules for PPF Calculation
There are some key rules that you need to bear in mind too. They are as follows:
- The maximum amount you can invest in a year is Rs. 1.5 lakh annually
- The minimum you can invest in PPF account is Rs. 500 annually
- Compounding of interest occurs once every year at the end of the financial year
- The maturity of PPF account is in 15 years and the proceeds are completely tax-free
- PPF rate is liable to change every quarter as per announcements made by the Finance Ministry
How to Understand the Results
The results provided by the online PPF calculator includes a table displaying key data that current and prospective PPF subscribers need to be aware of:
Opening Balance: This is the PPF account balance at the start of the year.
Amount Deposited: This is the PPF account balance at the end of the year after additional deposits have been made during the year.
Interest Earned: This is calculated based on the account balance at the end of the year. The balance in a PPF account is compounded on an annual basis.
Closing Balance: This is calculated by adding the interest earned from the current year to the opening balance and the additional deposits for the year.
Loan (Max.): Loan on PPF is available from completion of the 3rd year onwards till the end of the 6th year calculated from the date of account opening. The maximum loan available equals 25% of the opening balance of the PPF account for the previous year. After completion of the 6th year from the date of PPF account opening, no loan can be opted for but partial withdrawals can be made. The maximum loan amounts in the table are based on the assumption that no loan has been taken during the previous year.
Withdrawal (Max.): Partial withdrawal from PPF account is allowed after completion of the 6th year i.e. the beginning of the 7th year onwards. The maximum withdrawal amount is the lesser of the following:
- 50% of the account balance at the end of the previous year calculated from year in which withdrawal is made
- 50% of the account balance at the end of the 4th year preceding the year in which withdrawal was opted for.
The Withdrawal (Max.) amounts provided by the online PPF calculator are based on the assumption that no withdrawals/loans have been taken by the account holder in the previous year.
PPF Calculation Examples for Different Investment Tenures
Since PPF is annually compounded, the longer you stay invested in PPF the more benefit you can avail. To understand how the power of compounding works in your favour when it comes to PPF calculation, let’s consider the following table which shows the principal invested, the PPF interest earned and the PPF maturity value for 15, 20 and 30 year tenures.
|Investment Period||Total PPF Investment||Total Interest Earned||Maturity Value|
|15 years||Rs. 1.5 lakh||Rs. 1.4 lakh||Rs. 2.9 lakh|
|20 years||Rs. 2 lakh||Rs. 2.88 lakh||Rs. 4.88 lakh|
|30 years||Rs. 3 lakh||Rs. 9 lakh||Rs. 12 lakh|
In this PPF calculation example, we have assumed that the annual investment amount is Rs. 10,000 and the PPF interest rate is 7.1% per annum (current PPF interest rate for Q1 of FY 2021-22 is 7.1%).
The above example shows the power of compounding when investing in PPF – your maturity amount increases from Rs. 2.9 lakh to Rs. 12 lakh just by investing Rs. 1.5 lakh more over a 15 year period as long as you stay invested in your PPF account for 30 years instead of 15 years.
PPF Interest Rates FY 2021-22
As of Q1 (April-June) FY 2021-22, the PPF interest rate is 7.1% p.a. and the PPF account balance is compounded annually. The interest rate applicable to the Public Provident Fund is decided by the Ministry of Finance and is liable to change every quarter. You can use the calculator to get PPF returns based on different interest rates. The following are the recent quarter-wise historic PPF interest rates:
|Time Period||PPF Interest Rate (p.a.)|
|Q4 FY 20-21||7.1%|
|Q3 FY 20-21||7.1%|
|Q2 FY 20-21||7.1%|
|Q1 FY 20-21||7.1%|
|Q4 FY 19-20||7.9%|
|Q1 FY 19-20||8.0%|
|Q4 FY 18-19||8.0%|
|Q3 FY 18-19||8.0%|
|Q2 FY 18-19||7.6%|
|Q1 FY 18-19||7.6%|
|Q4 FY 17-18||7.6%|
|Q3 FY 17-18||7.8%|
|Q2 FY 17-18||7.8%|
Loan against PPF
The option of loan against PPF is available from the 3rd year calculated from the account opening date till the end of the 6th year of the PPF account. The amount that can be availed as a loan is linked to the total value of PPF deposits plus any accrued interest.
The amount that is availed as a loan against PPF is equal to 25% of the PPF balance in the account for the year preceding the year of PPF loan application. For example, if you have applied for a PPF loan in March 2019, the qualifying amount will be calculated based on the closing balance in March 2018.
Let’s assume that you have invested Rs. 10,000 per year in your PPF account for the past 3 years, in that case, your total investment for the period will be Rs. 30,000 while the PPF maturity amount for the period will be Rs. 34,994. At the end of that year, you can withdraw a maximum of Rs. 2,698 as a loan against PPF i.e. 25% of the PPF balance at the end of the 1st year. Similarly, as per the current loan against PPF calculation rules, in the 6th year, you will be able to withdraw Rs. 12,137 i.e. 25% of PPF balance at the end of the 4th year.
PPF Withdrawal Rules
The PPF account matures after the completion of 15 years calculated from the day the account was opened. After maturity, the entire PPF account balance can be withdrawn. However, after the end of the 6th year, PPF subscribers are allowed to make partial withdrawals from their account. The qualifying amount for partial PPF withdrawal is automatically calculated by the PPF calculator and is the lesser of the following amounts:
- 50% of the PPF account balance in the year preceding the year of a loan application or;
- 50% of the PPF account balance in the 4th financial year preceding the year of the loan application.