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Online PPF Calculator for India in 2020

PPF Calculator for SBI, Post Office, ICICI PPF Investments Current PPF Rate is 7.1%, w.e.f 1 st April 2020. Lock-in 15 Years Calculate how much your PPF contribution would have grown to using this calculator.

Explore other alternatives like ELSS funds and how it impacts the growth of your wealth.

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Please enter amount between 500 and 1,50,000
Please enter valid period between (15-50 Years)

Wealth Gained

Total Investment

Duration

Total Corpus Created

Table of contents

 

Mutual Funds better than PPF

Investing in ELSS funds recommended by Scripbox would get you returns of 12% p.a.

Here are the shortlisted funds by Scripbox

Funds Yeild to Maturity
Motilal Oswal Long Term Equity Fund 12%
Mirae Asset Tax Saver Fund 12%

 

PPF Interest Rate 2020

Financial Year Time Period Returns(per annum)
2020-2021 April 2020 - June 2020 7.1%
2019-2020 January 2020 - March 2020 7.9%
2019-2020 October 2019 - December 2019 7.9%
2019-2020 July 2019 - September 2019 7.9%
2019-2020 April 2019 - June 2019 8.0%
2018-2019 January 2019 - March 2019 8.0%
2018-2019 October 2018 - December 2018 8.0%
2018-2019 July 2018 - September 2018 8.0%
2018-2019 April 2018 - June 2018 7.6%
2017-2018 January 2018 - March 2018 7.6%
2017-2018 October 2017 - December 2017 7.8%
2017-2018 July 2017 - September 2017 7.8%
2017-2018 April 2017 - June 2017 7.9%
2016-2017 October 2016 - March 2017 8.0%
2016-2017 April 2016 - September 2016 8.1%
2015-2016 April 2015 - March 2016 8.7%
2014-2015 April 2014 - March 2015 8.7%
2013-2014 April 2013 - March 2014 8.7%
2012-2013 April 2012 - March 2013 8.8%
2011-2012 April 2011 - November 2011 8.0%
2011-2012 December 2011 - March 2012 8.6%
2010-2011 April 2010 - March 2011 8.0%
2009-2010 April 2009 - March 2010 8.0%
2008-2009 April 2008 - March 2009 8.0%
2007-2008 April 2007 - March 2008 8.0%
2006-2007 April 2006 - March 2007 8.0%
2005-2006 April 2005 - March 2006 8.0%
2004-2005 April 2004 - March 2005 8.0%

 

What is PPF?

PPF stands for Public Provident Fund. It has been introduced in 1968 for the aim to mobilize small savings into an investment with reasonable returns with additional benefits to save tax. It helps one build a retirement corpus. The current interest rate on PPF is 7.1% compounded annually. PPF is backed by the government of India and the risk involved is very minimal and it offers guaranteed risk-free returns. Also, it falls under EEE status which means that the amount invested, interest earned and maturity amount received are all tax-free.

PPF has a minimum tenure of 15 years which can be extended indefinitely in blocks of 5 years. Furthermore, the minimum investment in PPF account is Rs 500 and maximum is Rs 1,50,000. Investments can be made in lump sum or in a maximum of 12 installments. Deposits into a PPF account have to be made at least once a year for 15 years.

It's easy to open a PPF account. All one needs is to submit an application form along with KYC, address proof, identity proof, and signature proof. A PPF account can be opened with a Post Office or any other nationalized banks. Some private banks are also authorized to help open PPF accounts. Amount invested in PPF account is locked in for 15 years. But there is an option to withdraw money from the start of 7 th year, after completing 6 years. One can withdraw the amount once a year.

How much to invest in PPF?

Though the upper limit of 80c investments is 1.5 lakhs, you should check how much you need to invest in PPF and also how much you can reduce in taxes with this investment. The minimum amount of investment is Rs 500 and maximum of Rs 1,50,000. Though PPF offers guaranteed returns, it isn’t advised to invest entire amount in this. This investment comes with a 15-year lock-in period.

Why invest in PPF?

PPF is the best option for investors who are looking for long-term investment, are risk averse and looking for guaranteed returns. For investors who are looking at higher returns are willing to absorb some risk can explore other options. PPF is tax efficient. It falls under the EEE status of 80C. The investment, interest and maturity amount is tax-free. Easy deposits can be made in 12 installments in a year. PPF offers flexibility in deposits.

Does PPF compound interest annually?

The Public Provident Fund scheme is a long term-savings-cum-tax-saving instrument introduced by the National Savings Institute of the Ministry of Finance. The PPF scheme aims at mobilizing small savings among the investors.

The Public Provident Fund is under the EEE tax category under the Income Tax Act. The amount invested, interest earned and maturity value all are exempt.

Yes, the interest on public provident funds is compounded annually. The PPF interest is calculated monthly and credited at the end of the year.

The PPF interest rate is fixed quarterly by the Ministry of Finance, Government of India from April 1st, 2016. The banks offer PPF accounts at the interest rate fixed by the Government of India. The current rate of interest applicable from 1st April 2020 is 7.10%

The PPF account interest is calculated and paid on the amount standing in the investor’s account. The PPF scheme interest rate is regulated by the Government of India and over the past few years the return has been witnessing a downtrend.

PPF Calculation Formula

  • The interest on PPF is calculated on the lowest balance in the PPF account between the 5th day and the end of the month.
  • If an investor deposits an amount before the 5th of each month, the investor will get interest for that month on that deposit. Otherwise, the interest is calculated on the previous balance in the PPf account
  • If an investor is investing in PPF monthly, then investing before 5th or after 5th will have a marginal effect on the PPF interest of a few hundred rupees.
  • If an investor is investing in a PPF scheme in a lump sum per year, then invest before the 5th of April. The interest earned will be on more balance for the month of Apr.

 

Public Provident Fund Calculation Formula

The formula for calculating expected interest and the maturity value is given below:

A = P [({(1+i) ^n}-1)/i]

Where,

A is the maturity amount

P is the principal amount invested in the PPF account

I is the expected interest rate of return on PPF scheme

N is the tenure for which is the amount is invested in PPF scheme

From the above formula we can conclude that the return will be higher for a higher investment period.

How to calculate expected returns from PPF?

The expected returns from PPF can be calculated from the formula given below:

A = P [({(1+i) ^n}-1)/i]

Where,

A is the maturity amount

P is the principal amount invested in the PPF account

I is the expected interest rate of return on PPF scheme

N is the tenure for which is the amount is invested in PPF scheme

Let us understand the concept of compounding of interest and its effect on overall investment with the help of 3 investment alternatives.

Mr. Arun invests Rs 20,000 every year at 7.90% interest rate.

The investment period alternatives are given below

Alternative 1: 15 years

Alternative 1: 20 years

Alternative 1: 25 years

Investment period Total amount invested Total interest earned Maturity value Incremental Maturity Value
15 years Rs 300,000 Rs 281,402 Rs 581,402 -
20 years Rs 400,000 Rs 576,672 Rs 976,672 = (Rs 976,672 - Rs 581,402) = Rs 395,270
25 years Rs 500,000 Rs 1,054,769 Rs 1,554,769 = (Rs 1,554,769 - Rs 976,672) = Rs 578,097

From the above example, we can conclude that

  1. With an additional 5 years of investment of Rs 100,000 the maturity increases from Rs 5.8 lakh to Rs 9.7 lakh
  2. With an additional next 5 years of investment of another Rs 100,000 the maturity increase from Rs 9.7 lakh to Rs 15.5 lakh
  3. With an additional overall 10 years of investment of Rs 200,000 the maturity increases from Rs 5.8 lakh to Rs 15.5 lakh

This makes the concept of compounding clear and helps us understand the importance of compounding on interest for PPF scheme in India and how the maturity value increases with an increase in investment period for the same amount invested

Few points to remember w.r.t interest on PPF

  • The interest on PPF is compounded annually
  • The compounding of interest takes place once every year at the end of every financial year
  • The interest rate is fixed by the Government every quarter.
  • Since the interest is compounded annually, the longer the period of investment, the higher will be the interest earned

PPF Investment Schedule

To understand the entire concept let us take an example and understand through the PPF investment schedule.

Suppose an investor invests Rs 1.1 lakh every year, avail loan on PPF and withdraw permissible the amount invested. The rate of interest is assumed to be 7.90% (current rate of interest as of 1st April 2020 is 7.1%)

The below table will clear the concept of compounding, opening balance, the effect of loan and withdrawal on the PPF account and its maturity value

Years Opening Balance Amount Deposited Interest Earned Closing Balance Loan Availed Withdrawal
1 Rs.0 Rs.110,000 Rs.8,690 Rs.118,690 Rs.0 Rs.0
2 Rs.118,690 Rs.110,000 Rs.18,067 Rs.246,757 Rs.0 Rs.0
3 Rs.246,757 Rs.110,000 Rs.28,184 Rs.384,941 Rs.29,673 Rs.0
4 Rs.384,941 Rs.110,000 Rs.39,100 Rs.534,041 Rs.61,689 Rs.0
5 Rs.534,041 Rs.110,000 Rs.50,879 Rs.694,920 Rs.96,235 Rs.0
6 Rs.694,920 Rs.110,000 Rs.63,589 Rs.868,509 Rs.133,510 Rs.0
7 Rs.868,509 Rs.110,000 Rs.77,302 Rs.1,055,811 Rs.0 Rs.192,471
8 Rs.1,055,811 Rs.110,000 Rs.92,099 Rs.1,257,910 Rs.0 Rs.267,021
9 Rs.1,257,910 Rs.110,000 Rs.108,065 Rs.1,475,975 Rs.0 Rs.347,460
10 Rs.1,475,975 Rs.110,000 Rs.125,292 Rs.1,711,267 Rs.0 Rs.434,255
11 Rs.1,711,267 Rs.110,000 Rs.143,880 Rs.1,965,147 Rs.0 Rs.527,906
12 Rs.1,965,147 Rs.110,000 Rs.163,937 Rs.2,239,084 Rs.0 Rs.628,955
13 Rs.2,239,084 Rs.110,000 Rs.185,578 Rs.2,534,662 Rs.0 Rs.737,988
14 Rs.2,534,662 Rs.110,000 Rs.208,928 Rs.2,853,590 Rs.0 Rs.855,634
15 Rs.2,853,590 Rs.110,000 Rs.234,124 Rs.3,197,714 Rs.0 Rs.982,574

Advantages of using PPF Account Calculator

A PPF account calculator is an online simple and easy to use tool. A PPF calculator provides an estimate of interest earned, maturity value for a given amount invested and investment period.

An investor can use the PPF calculator by simply visiting our website, enter the amount to be invested and period of investment. The PPF maturity calculator will provide the total corpus created at the end of the investment period.

Today it is very important to know in advance the expected maturity amount. This helps an investor make the most appropriate decision and choose between alternatives to PPF which will match his/ her financial goals

The advantages of using an online PPF account calculator is listed below;

  1. An online PPF interest calculator provides an investor with an estimation of how much interest can be earned given an amount of principal in hand.
  2. It helps an investor in making the decision on the investment horizon, for how long should the investment be held to achieve the investment goal
  3. An online PPF maturity calculator provides the schedule of investment in advance (as shown above), this helps in planning the yearly amount to be invested, loan that can be availed and the amount that can be withdrawn

Benefits of investing in PPF scheme

  1. The interest rate offered ranges between 7% to 8% based on historical returns. This interest rate is higher than the interest on the savings account balance and slightly higher interest on FDs
  2. The tax benefits are a major factor for an investor investing in PPF. The principal amount invested is allowed as a deduction up to Rs 1.5 lakh under section 80C. The interest earned and the maturity amount is also exempt from tax. This makes the entire investment exempt-exempt-exempt for principal, interest and maturity amount.
  3. PPF investments are backed and managed by the Government of India making it more secure than other investment options like a savings account, FD, ELSS, etc.
  4. Since the PPF scheme is entirely managed by the Government of India it is safer than a savings bank account and FDs. The bank account balance and FDs are insured by Deposit Insurance and Credit Guarantee Corporation (DICGC) only up to Rs 5 lakhs
  5. An investor is allowed to take a loan against the PPF account from the 3rd year to the 6th year of opening the account. An investor can also withdraw a partial amount from the 7th financial year after the year in which the account is opened
  6. PPF allows a guardian of a minor child or unsound child to open a PPF account on their behalf. This is a good option for them to secure their future.
  7. The balance in a PPF account cannot be attached to an investor’s liabilities in the event of insolvency. Hence, this investment can serve as a last recourse for the investor to ensure future security.

Should you invest in a PPF scheme?

An investor looking for a secure and safe investment option backed by the Government can consider the PPF scheme as a better option to invest given the benefits it carries.

An investor with the investment objective of securing retirement, creating a long term investment plan, end to end tax benefit, risk-free option and does not want the effect of market fluctuations can opt for PPF

No doubt PPF comes with a lock-in period of 15 years but it allows a partial withdrawal option and loan facility as well. This ensures an investor’s liquidity in a situation of emergency. The risk factor involved is low in PPF investment as it is backed by the Government of India.

The ideal time to invest is on or before the 5th day of the month to earn optimum returns. A PPF account can be easily opened online and offline at nationalized banks, private banks, post offices and its branches

However, if an investor is young and is looking only for a way to save tax PPF is not the only and best option to invest. An investor can look for other options like ELSS, NPS.

What are the alternatives to PPF?

PPF is a popular investment among the various tax-saving options. An investor must analyze the alternatives to the PPF scheme and then make an investment decision. This decision must be the basis which is best suited for his/ her financial goals which can be either long term like 15 years or short term say 5 years for a given lock-in period and returns expected

Let us understand the alternatives to PPF and the risk, interest, and tax implications they offer.

Scheme Plan Lock-in period Risk Level Interest Rate Tax Implication
Equity Linked Savings Scheme (ELSS) 3 years High 12% annually (historical). Subject to market movements Principal amount- 80C deduction Interest- 10% LTCG Dividend- 10% DDT
National Savings Certificate (NSC) 5 years Low 6.8 % p.a. (Compounded Annually) Deduction on a deposit made up to Rs 1.5 lakh
Unit Linked Insurance Plan (ULIP) 5 years High Subject to ULIP fund performance in the market Principal amount- 80C deduction Interest-Tax-free
National Pension Scheme (NPS) 3 years Low 12% - 14%, depends on the type of scheme Principal amount- 80C deduction Interest-Tax-free
Pradhan Mantri Vaya Vandhana Yojana (PMVVY) 10 years Low 8.30% Principal amount- 80C deduction Interest-Tax-free
Senior Citizen’s Saving Scheme (SCSS) 5 years Low 7.40% Principal amount- 80C deduction Interest-Tax-free
Tax Saving Fixed Deposits 5 years Low 6.7%, differs bank to bank Principal amount- 80C deduction Interest- Taxable

 

How to open a PPF account?

A PPF account can be opened at all designated branches of SBI Bank and other public sector banks and private sector banks.

These banks include Allahabad Bank, Axis Bank, Bank Of India, Central Bank Of India, HDFC Bank, ICICI Bank, Bank Of Baroda, Corporation Banks and others

The documents required to open a PPF account are the same across all the banks. However, the process of the application might be slightly different.

All the documents must be self-attested and the originals must be presented while opening an account.

The documents required to open a PPF account are listed below:

  1. PPF account application form, available at the bank branch, online website of banks, Indian Post portal
  2. ID proof i.e. PAN card, Aadhaar, driving license, voter ID, passport
  3. Address proof i.e. telephone bill, electricity bill, ration card copy, Aadhaar.
  4. 2 passport size photographs
  5. To transfer the amount in PPF account, Pay-in-slip or a signed cheque in favor of PPF account.
  6. Age proof in case of minors i.e. birth certificate

Which banks provide a PPF account?

PPF account is offered by many nationalized banks, private banks, post offices and its branches with the facility to apply online and offline.

Following banks provide PPF account facility

Bank Online facility available Type of bank
State Bank of India Yes Public Sector
ICICI Bank Yes Private Sector
HDFC Bank Yes Private Sector
Central Bank of India Yes Public Sector
Bank of India (BOI) Yes Public Sector
Union Bank of India No Public Sector
Bank of Maharashtra No Public Sector
IDBI Yes Public Sector
Bank of Baroda (BOB) No Public Sector
Vijaya Bank No Public Sector
Allahabad Bank Yes Public Sector
Oriental Bank of Commerce(OBC) No Public Sector
Canara Bank Yes Public Sector
Corporation Bank No Public Sector
Dena Bank No Public Sector
Indian Bank No Public Sector
Axis Bank Yes Private Sector
Indian Overseas Bank (IOB) No Public Sector
Punjab National Bank (PNB) No Public Sector
United Bank of India No Public Sector
Syndicate Bank No Public Sector
Andhra Bank No Public Sector
UCO Bank No Public Sector

 

How to take a loan on PPF?

  1. An account holder can avail of a loan against the deposits in a PPF account. An account holder can take a loan from the third financial year and till the end of the sixth financial year.
  2. The loan amount cannot exceed 25% of the balance at the close of two years immediately preceding the year in which the loan is being availed. Example- if the account was opened in the financial year 2017-18, the first can be availed from the financial year 2019-20
  3. Before applying for a new loan, the account holder must clear the earlier loan. In a financial year, the account holder can avail only one loan even if the earlier loan is paid off
  4. The loan taken must be repaid within 36 months. The account holder must submit Form D as a loan application. The rate of interest on the loan will be 2% over and above the prevailing PPF interest rate.

How to withdraw money from PPF?

  • An account holder can make a partial withdrawal from his PPF account every year, starting from the seventh financial year.
  • The withdrawal is allowed up to 50% of the total balance at the end of the fourth financial year immediately preceding the year of withdrawal. Or Total balance at the end of the financial immediately preceding the year of withdrawal whichever is lower
  • PPF withdrawal is tax-free. After the end of 15 years of PPF account, an account holder can choose to stay invested even without making any further deposits. The current account balance will continue to earn interest. During this extended period, an account holder can withdraw any amount once every year.
  • After the expiry of 15 years, an account holder can choose to stay invested and also make deposits, the account can be extended in blocks of 5 years
  • During this extended block of 5 years, an account holder can withdraw up to 60% of the balance at the beginning of each block.

Here are the advantages of PPFs vs. other investments

  1. One of the significant PPF account benefits over other alternatives is that it is backed by the Government. The investment is of low risk with guaranteed returns and PPF account cannot be attached by even a court order to pay off debtors.
  2. The entire world of the PPF is tax-exempt be it principal amount invested, interest earned or maturity amount making it tax efficient and attractive to an investor
  3. Small savings, good returns and flexibility to invest. An investor can start investing with an amount as low as Rs 500 yearly, interest is compounded annually and investment can be made in installments or lump sum
  4. Ensured liquidity with loan facility and partial withdrawal, so an investor has an option to make full use of the amount invested.
  5. Flexibility to either withdraw the entire amount on maturity or re-invest for next the 5 years and keep investing.

To calculate the expected returns, visit our website, and use PPF online calculator.

ELSS Vs PPF

Returns of PPF are guaranteed by the government. When PPF was introduced it gave returns of 12% per annum. Now returns from PPF are 7.1%. Even with guaranteed returns, one cannot solely depend on PPF as an investment avenue as inflation will eat up the returns. For investors who are risk averse and looking for tax saving, PPF can be the best option. But for risk lovers, there are certainly other options to explore. The best among them is ELSS fund which also a tax saving investment option.

Returns from ELSS funds are market-linked and hence there are no assured returns. Yet, historically average ELSS funds have generated healthy returns of ~14% over the long-term while the good ones have given 20%! One can expect 12–14% returns from ELSS if remaining invested for 7–10 years.

Example

Mr. Anirudh has invested Rs 1,50,000 in PPF and his friend Ms. Annanya invested Rs 1,50,000 in ELSS. Both of them have stayed invested for 15 years. Following table shows the returns of both before and after inflation (4%) and tax.

  PPF ELSS
Amount invested Rs.150,000 Rs.150,000
Tenure 15 15
Returns 8% 13%
Maturity Amount (Pre tax) Rs. 475,825 Rs. 938,141
Maturity Amount (Post tax) Rs. 475,825 Rs. 754,326.9
Post Inflation Returns (Pre Tax) Rs. 270,142 Rs. 546,373
Post Inflation Returns (Post Tax) Rs 270,.142 Rs. 501,735.7

The returns are higher in case of ELSS both and after inflation and tax. Despite being subject to a tax of 10% on long-term gains, ELSS stands out as a clear winner.

What is an 80C deduction?

Section 80 C of the Income Tax Act, exempts certain investments and expenditures from being taxed. It allows deductions up to Rs 1,50,000, irrespective of your tax bracket. Small investments in savings schemes like PPF, Life Insurance, NSC, ELSS, Pension Plans and Infrastructure Bonds qualify for deduction under 80 C.

Public Provident Fund (PPF)

PPF is a small savings scheme offered by the government of India through banks. Investments made in PPF have a lock-in of 15 years and give a fixed return according to the interest rate published by the Ministry of Finance every quarter. The interest rate on PPF stands at 7.1% effective from 1st April 2020 as per the latest govt. notification.

ELSS Funds

Tax-saving ELSS Mutual funds are eligible for tax deductions under Section 80 C. These funds invest in stocks and are hence linked to stock markets. These funds have a lock-in period of 3 years (lowest of any tax-saving option) and hence the investors can not withdraw their money before the 3-year period. These are the only Mutual funds that have a lock-in.

Employee Provident Fund

EPF is a deduction that the employer makes from your salary, this contribution forms part of 80 C.

Children Tuition Fees

Fees paid towards full-time education of your children can be claimed as part of 80 C deduction. This means fees paid to an educational institution, college or school. This deduction can be availed for a maximum of 2 children. And not for, your own education or your spouse’s education.

Repayments of Home Loan Principal

Principal amount repayments on your housing loan are deducted under 80 C.

Life Insurance Premium

Life insurance premium paid in the year can be claimed for deduction. Premium paid for yourself, your spouse or your children can be claimed under 80 C. You can have more than one life insurance policy and premium paid for all are eligible for deduction.

Tax Saving Fixed Deposits

Tax-saving FDs are a special category of FDs which have a 5-year lock-in period. Unlike regular FDs, premature withdrawals are NOT allowed from Tax-saving FDs. They qualify as an 80 C tax-saving instrument and thus investments up to Rs1,50,000 p.a. are exempt from income tax. However, the interest on these FDs remains taxable as per your income at marginal income tax rate. TDS of 10% also applies.

Unit Linked Insurance Plans (ULIPs)

ULIPs are a variant of traditional endowment plan. ULIPs have a high premium. They offer investment in mutual funds along with insurance, therefore, there are many charges towards these. The charges on ULIPs are funds allocating charges, fund management fee, policy administration fee, fund switching charges, and agent fees.

Life Insurance Premium

Life insurance premium paid in the year can be claimed for deduction. Premium paid for yourself, your spouse or your children can be claimed under 80 C. You can have more than one life insurance policy and premium paid for all are eligible for deduction.

Tax Saving Fixed Deposits

Tax-saving FDs are a special category of FDs which have a 5-year lock-in period. Unlike regular FDs, premature withdrawals are NOT allowed from Tax-saving FDs. They qualify as an 80 C tax-saving instrument and thus investments up to Rs1,50,000 p.a. are exempt from income tax. However, the interest on these FDs remains taxable as per your income at marginal income tax rate. TDS of 10% also applies.

Can NRI invest in PPF?

According to a recent notification by the Government of India, NRIs will not be able to open the new Public Provident Fund (PPF) account. However, can hold an existing PPF account till maturity. Now, NRIs will also get the same interest rate on PPF as resident Indians. The PPF interest rate is at%. NRIs can continue to invest up to Rs.1.50 lakh per annum in PPF until it reaches the 15-year maturity period.

How can NRI's withdraw?

NRI's can withdraw PPF through a 3-step process:

Step 1

Find the PPF withdrawal request form from your bank’s website. If you can’t find it, then just type a simple letter mentioning that you want to withdraw the entire amount from your PPF account addressed to the bank where you hold the PPF account in. Mention the following details: PPF account number, date of the initial subscription, and the account number and IFSC of the bank account where you want the proceeds to go. The details should be of your NRO account.

Step 2

Courier the signed PPF withdrawal request to your relatives, parents, or siblings in the city where you have the NRE/NRO account. Provide an authority letter mentioning that you are allowing the person to follow the withdrawal process on your behalf. Also, send your identity/address details and statements of your NRO account and PPF account.

Step 3

The person on your behalf has to go to the bank where you have the NRE/NRO account. They have to attest these documents. After attestation is done, then the person has to visit the PSU bank for PPF withdrawal. The bank will accept the documents which are attested by your bank.

Frequently Asked Questions