Public Provident Fund (PPF) Calculator

PPF Interest Calculator

PPF Interest Calculation Details
PPF Current Interest Rate 7.10%
Lock in period 15 years
Minimum Deposit Amount for a Year Rs. 500
Tax Applicable on PPF interest No tax applied

PPF or Public Provident Fund is one of the popular savings schemes in India, which also saves on tax. It was introduced by the National Savings Institute in 1968, under the Ministry of Finance. A PPF interest calculator on Loanbaba is an online financial tool that helps you calculate the interest earned on your PPF account. It also calculates the maturity amount that you are entitled to get after 15 years of this investment.

PPF is one of the investment schemes, which offers Exempt, Exempt, Exempt (EEE) benefit, tripling tax exemption in the below-mentioned ways:

  • Interest on PPF is completely exempted from tax.
  • The maturity amount on the scheme is also 100% tax exempted.
  • Income tax benefits up to Rs. 150,000 can be availed on PPF, under Section 80C of tax saving investment.

In this post, we will discuss PPF interest rate facts, maturity period, PPF calculation formula, the working of PPF calculator, the relation between investment period and PPF interest amount, premature closure, SBI PPF account, how to open a PPF account, and FAQs.

Facts about PPF Interest Rates

  • The interest rate on PPF is fixed quarterly by the Government of India’s Ministry of Finance from 1 April 2016
  • The interest rate on PPF is compounded annually
  • The current PPF rate offer by banks is 7.10%
  • PPF calculator calculates the interest earned as per the type of investment (variable or fixed) and the maturity amount

Maturity Tenure for PPF

The PPF maturity period is 15 years. It is calculated from the date of the PPF account opening. However, you can extend this period by dropping an application for it. The extension is valid for up to 5 years more.

  • Withdrawal
  • You can withdraw from the Public Provident Fund after 7 years from the first deposit. But this is subject to up to 50% of the amount you have in the account. You can only take out the entire amount at the time of maturity or after the subscriber passes away.

  • Extension of Tenure
  • You need to provide Form H to the financial institution within a year from the maturity date. You can extend the maturity period to 5 years. In this duration, you can deposit money in the account. After 5 years, you can apply to extend the tenure again. Remember, there is no limit to the number of extensions you can request on the PPF account.

    At the start of the extension tenure, you can only withdraw 60% of your account balance. And you can request withdrawal only once in a financial year.

How to Calculate PPF Interest Amount?

The formula for PPF interest calculation is: = P [({(1+i)^n}-1)/i] here:

  • ‘A’ is the maturity amount
  • ‘P’ is the amount you originally invested
  • ‘i’ is the applicable rate of interest
  • ‘n’ is the investment tenure

How Does the PPF Interest Calculator by Loanbaba Work?

The online PPF calculator works in the following ways:

  • It calculates the interest earned for every year. The interest-earning will depend on the type of deposit, fixed or variable and the amount you deposit every year
  • The calculator also provides an estimate of the total amount of investment you make in this investment, for a particular financial year
  • It is assumed that the amount deposited in this scheme is done on 1st April, every year. This way, the interest is calculated for a financial year according to the prevailing market rate

Connection Between Investment Period and PPF Interest Calculation

The investment period of the Public Provident Fund is inversely proportional to the earned interest amount on the investment you make. Thus, you will earn more interest if you keep money in the account for a longer tenure. Here is an illustration to better understand the connection between the investment tenure and calculation of PPF interest:

  • For instance, you invest Rs. 1 lakh for 15 years at 7.10%
  • The total investment amount is Rs. 15 lakhs till the end of 15 years
  • Then the interest amount earned is Rs. 12,12,139
  • The total PPF maturity amount is Rs. 27,12,139
  • But if you extend the tenure to 20 years, then the interest earned will be Rs. 44,38,859
  • Also, the interest earned will be greater if you increase the investment amount as well

PPF Account Premature Closure

After 2019, you can use Form 5 to prematurely close the PPF account easily. You can do so after 5 years from the date of account opening. Premature closure is possible if there is a change in the account holder’s residency status. Also, closure is available for the higher education of self and dependent children. But a penalty of 1% is applicable on the balance amount on premature closure.

Here are the changes in the PPF Forms henceforth:

  • The account opening - Form A is now changed to Form 1
  • The partial withdrawal Form 2 is now changed to Form C
  • For account closure after maturity, you will need Form 3
  • Form 2 instead of Form D for loan against PPF
  • Form 4 instead of Form H to extend the tenure
  • Form 5 for premature closure
  • Form 1 instead of Form E for nomination

SBI PPF Account

Public Provident Fund by SBI (State Bank of India) is a government scheme that is distributed through the bank branches and post offices, and every bank branch in India. You can add nominees to your account and manage the services and the account online. To open an SBI PPF account, you can visit the nearest branch and fill the PPF form to carry out the required formalities.

How to Open a PPF Account in SBI, Other Banks, and Post Offices?

  • You can open a PPF account in any nationalized bank, authorized private bank, or a post office
  • Visit the bank/post office/financial institution and fill the PPF form and submit it with the deposit amount to the bank
  • The minimum deposit that you have to make is Rs. 500 in a year
  • You can deposit a maximum of Rs. 1.50 lakhs in the account
  • Any deposit amount exceeding this threshold will not earn any interest
  • The deposit can be made in 12 installments in a year or lump-sum
  • Entire amount withdrawal can be done at maturity or after 15 years

Frequently Asked Questions on PPF Scheme

Below given are some of the important questions asked about the Public Provident Fund.

Below are the details of who can apply for a PPF account.

  • Any Indian resident who is over 18 years of age can open a Public Provident Fund account. A person can have just one account in his name.
  • The account can be opened for a minor as well, but it must be done so by the parents and the account must have the names of their children. Grandparents cannot account for their grandchildren.
  • HUF (Hindu Undivided Family) cannot open the account. But if a PPF account was opened by HUF before 13 May 2005, then that can be continued to the maturity period without any further extensions.
  • NRIs are not eligible to open a PPF account. But non-resident Indians who had a PPF account can continue the same until the maturity of 15 years.

The PPF account matures after 15 years from its opening date. You can extend the account for a block of 5 years. To extend the maturity of your PPF account, you need to submit Form H to the bank within a year from the maturity date. There is no limit to the number of times you request an extension. But you can withdraw only up to 60% of your account balance at the start of the extension period. Withdrawal is restricted to once in a particular financial year.

You can withdraw from your Public Provident Fund account after it completes at least 7 years from its date of first deposit, subject to an upper limit of 50% of the amount available in the account. You can only make a complete withdrawal on the scheme’s maturity or the subscriber’s demise.

In 2016, an amendment was made to the PPF scheme to facilitate the premature closing of the account. You can close the account after it completes at least 5 years. But premature closure is only allowed if the reason for the same is to fund higher education or for medical treatment of family members. If you close your PPF account before its maturity then you have to pay 1% of your account balance as a penalty to the bank.

Yes, you can avail of a loan on your Public Provident Fund between the 3rd and 6th financial year of opening this account.

  • You can get up to 25% of the account balance at the end of 2nd year preceding the year in which the loan was applied for, as the loan amount.
  • Interest on a loan against PPF is charged at 2% more than the interest earned on the deposit. For instance, if the interest earned on your account is 7.10%, then the interest on the loan will be 9.10%.
  • You can repay the loan amount in 2 or more monthly installments or lump-sum within a 36 months period.
  • No loan can be taken from the 7th year of opening of an account, the reason being that you become eligible to make partial withdrawals.
  • After repayment of the principal amount, the interest of the loan is repayable in not more than 2 monthly installments.
  • You can reapply for a second loan after successfully repaying the previous loan.

Disclaimer: All information stated is purely for informational purposes. The PPF interest rates and scheme information may differ from what is here on the page, given any recent changes in bank and government policies.