PPF calculator for long-term planning

PPF Calculator India – Detailed Guide

The Public Provident Fund is a government-backed small savings scheme with a mandatory 15-year lock-in that delivers tax-free, compounding growth under EEE status. This PPF calculator estimates how your regular contributions accumulate into a maturity corpus, letting you test different deposit amounts and frequencies before committing your money.

Yearly deposit behaviour and the 5th-of-month rule

PPF interest is calculated monthly on the minimum balance between the 5th and the last day of the month, then credited to the account at the close of each financial year.

• Deposits made on or before the 5th of a month earn interest for that entire month. Deposits made on the 6th or later forfeit that month's interest.
• The most efficient deposit pattern is a lump-sum contribution on 1 April (or any date before the 5th), so the full year's deposit earns interest for all 12 months.
• Monthly instalments are convenient but slightly less efficient because later-month deposits lose some months of interest each year.
• Annual contributions are capped at ₹1.5 lakh; the minimum to keep the account active is ₹500 per financial year.

The 15-year lock-in and what it means in practice

The lock-in is counted from the end of the financial year in which the account is opened — not from the actual opening date. An account opened in October 2024 matures on 31 March 2040 (end of FY 2039–40), not in October 2039.

• No withdrawals are permitted before the 7th financial year from account opening.
• Pre-mature closure is allowed only in specific hardship cases (serious illness, higher education, change of residency) after 5 financial years, subject to a 1% interest penalty.
• The 15-year compounding horizon is the primary reason PPF can outperform tax-saving FDs on a post-tax basis even at similar stated rates.

Extension rules after maturity

At the end of 15 years, you have three choices:

• Close and withdraw: Take out the entire corpus, which is fully tax-free.
• Extend with contributions: Continue depositing for 5-year blocks. Each deposit in the extension period remains eligible for Section 80C deduction and earns interest at the then-prevailing PPF rate.
• Extend without contributions: Leave the existing corpus in the account earning interest without adding fresh deposits. You can make one partial withdrawal per year in this mode.

You must notify the bank or post office of your extension choice within one year of maturity. Missing this window defaults the account to "extended without contributions" mode.

Loans and partial withdrawals

Limited liquidity is available through two routes, each with distinct eligibility windows:

• Loan against PPF: Available from the 3rd to the 6th financial year. You can borrow up to 25% of the balance at the end of the 2nd year preceding the loan year. The loan must be repaid within 36 months, and interest is charged at 1% above the PPF rate.
• Partial withdrawal: Available from the 7th financial year onwards. You can withdraw up to 50% of the balance at the end of the 4th year or the preceding year, whichever is lower — once per financial year.

Both routes are stopgap measures. Heavy use of loans or withdrawals reduces the compounding base and can meaningfully lower your final maturity figure.

Tax-free maturity and EEE status

PPF enjoys full EEE treatment under current Indian tax law:

• Exempt on contribution: Deposits qualify for Section 80C deduction up to ₹1.5 lakh per year (combined across all 80C instruments).
• Exempt on interest: Annual interest credited to the PPF account is not added to taxable income, unlike FD interest which is taxable at slab rate.
• Exempt on maturity: The entire corpus — original deposits plus accumulated interest — is received tax-free.

This triple exemption makes PPF particularly valuable for investors in the 30% tax bracket, where a 7.1% PPF rate is equivalent to a pre-tax return of roughly 10.1% on a taxable instrument.