PPF Calculator

How PPF builds a tax-free corpus

The Public Provident Fund is a government-backed savings scheme with a 15-year lock-in. You deposit up to ₹1.5 lakh each financial year, interest is credited annually at a government-set rate, and the whole thing compounds. Because deposits are made yearly and interest compounds once a year, earlier deposits earn interest for longer — the calculator models each yearly deposit growing to maturity and sums them.

Its standout feature is EEE (exempt-exempt-exempt) tax status: the deposit earns an 80C deduction, the interest is tax-free, and the maturity amount is tax-free too. Very few Indian instruments offer this.

Why PPF anchors a portfolio

PPF is effectively risk-free because it is backed by the Government of India, and its tax-free return makes its effective yield higher than a comparable taxable FD. For a taxpayer in the 30% bracket, a 7.1% tax-free PPF return is roughly equivalent to a 10% pre-tax FD. This makes PPF an excellent debt anchor to balance the volatility of equity SIPs.

What affects your maturity value

• Yearly investment — capped at ₹1.5 lakh per financial year.
• Interest rate — set quarterly by the government; currently 7.1%.
• Tenure — a minimum of 15 years, extendable in 5-year blocks.
• Timing of deposits — interest is calculated on the lowest balance between the 5th and month-end, so depositing early matters.

Common mistakes to avoid

A frequent error is depositing late in the financial year or after the 5th of a month, which loses interest. Investing the full ₹1.5 lakh before 5 April each year maximises the tax-free compounding. Another mistake is treating PPF as a short-term product — the 15-year lock-in punishes anyone who needs the money sooner. Finally, some savers close the account at maturity out of habit; extending it in 5-year blocks lets the tax-free corpus keep compounding, which is one of the best deals in Indian personal finance.