PPF Calculator

How to use the Fisdom PPF calculator?

Fisdom’s PPF calculator is a simple compound interest
variant. This easy-to-use PPF calculator requires investors to
input the below listed data set:

1. Yearly Deposit amount

You will have to fill in the yearly deposit amount
here. Depending upon the frequency of your deposits, you can
fill in the yearly PPF deposit amount. For Ex: If the deposit
amount is Rs. 500 and the deposit frequency is monthly, total
PPF deposit for the year will be Rs. 6,000.

2. Duration

Choose the duration for which you expect to be
invested in PPF. You can choose any tenure between 1 to 30
years.

3. Rate of Interest

The current rate of interest as decided by the
Government is prefilled for you.

After providing the above-mentioned data into the PPF
calculator, it gives instant information regarding PPF maturity
amount, PPF interest earned, total PPF investment and the net
return percentage.

How can a PPF calculator help you?

Just like any investment tracker, a PPF calculator
addresses investor concerns regarding the investment. The
calculator keeps a track of the growth that can be achieved on
the invested capital. Investors who already have a PPF account
would know that interest rates may change every month.

It is now easier to keep a track of changing interest
rates. With the help of a public provident fund calculator,
account holders can easily find out monthly changes in interest
rates.

Recommended read – How to open a PPF account?

Basic rules for PPF calculation:

There are some key rules that must be followed while
calculating PPF returns:

1. The maximum amount that can be invested annually is Rs. 1.5
   lakhs
2. The minimum annual investment required in a PPF account is
   Rs. 500
3. Interest compounding occurs once every year at the end of
   the financial year
4. PPF account maturity is set for 15 years and the proceeds
   are entirely tax free
5. Post the initial tenure of 15 years, it can be renewed in a
   block of 5 years.
6. PPF interest rate can change every quarter as per the
   Finance Ministry announcements.

PPF calculation for different tenures

Since PPF is compounded annually, the longer one
remains invested in it, the higher the benefit to be availed. To
understand the benefit of compounding with regards to PPF
calculation, the following table shows an example of the
principal invested, interest earned and maturity value to be
received for 15, 20 and 30 year tenures.

Assumptions in this PPF calculation are that the annual
investment amount is Rs. 10,000 and the ongoing PPF interest
rate is 7.1% per annum (since current PPF interest rate for Q1
of FY 2021-22 is 7.1%).

Important factors related to PPF calculation

Here are some of the important aspects related to PPF
calculation that investors must be aware of:

1. While calculating PPF returns, it is important to note the
   PPF account opening balance at the start of the year.
2. Interest earnings are calculated on a monthly basis. The
   lowest balance between 5th to the last date of the month is
   taken for the interest calculation. So it is important to
   deposit your contributions before the 5th of every month to
   earn interest for that month.
3. Investors can avail a loan on PPF after completion of the
   3rd year till the end of the 6th year. The loan amount that
   can be availed is calculated from the date of account
   opening. The maximum loan amount is equal to 25% of the
   opening balance of the PPF account for the previous year and
   no loan must have been availed in the preceding year. After
   the end of the 6th year from the date of PPF account
   opening, an investor cannot take a loan against PPF.
4. Partial withdrawals can be made after completing 6th year,
   i.e. the start of the 7th year. The maximum withdrawal
   amount must the lower of the following options:
   1. 50% of the previous year end’s account balance
      calculated from the year in which withdrawal is made
   2. 50% of the 4th year end’s account balance that
      precedes the year in which withdrawal was made.

Benefits of using PPF calculator

The benefits of using an online PPF calculator are
listed below:

1. It allows investors to get a clear idea of the interest that
   can be earned from a certain investment.
2. Investors can also gauge the scope of tax saving through PPF
   for a financial year.
3. Investors who find it difficult to decide on the maturity
   period of their investment can use the PPF calculator for
   near-accurate estimates.
4. The calculator also provides an estimation of total
   investment in a financial year.

Conclusion

PPF calculators can provide an insight on various
aspects of a PPF investment. This makes it easier for investors
to make calculated decisions for appropriate financial planning
in the long term. It is important to enter accurate details
about your PPF investment to get back accurate results on
expected returns.