Public Provident Fund (PPF) is a government-backed savings scheme loved by Indian taxpayers. It offers tax benefits, steady returns and long-term wealth building with a 15-year initial lock-in.
Key PPF features
- Minimum ₹500, maximum ₹1.5 lakh per financial year
- Interest rate set by government quarterly (check current rate)
- EEE status — investment, interest and maturity are tax-free
- Eligible for Section 80C deduction up to ₹1.5 lakh
How PPF interest works
Interest is calculated on the lowest balance between the 5th and last day of each month. That is why many investors deposit before the 5th of every month.
Interest is compounded annually and credited at year-end. Over 15 years, even modest yearly deposits grow significantly thanks to compounding.
Example plan
- Annual deposit: ₹1,50,000 (max limit)
- Assumed rate: 7.1% p.a. (illustrative — use current notified rate)
- Tenure: 15 years
- Approximate maturity: ₹40+ lakh (run exact numbers in calculator)
PPF extension after 15 years
After maturity you can withdraw fully, extend in blocks of 5 years with or without fresh contributions. Extension rules affect how you plan retirement corpus.
Who should use PPF?
- Salaried and self-employed looking for safe long-term savings
- Anyone maximising 80C with a government-guaranteed component
- Parents saving for child education 15+ years away
Use Master Calc PPF Calculator
Our PPF Calculator shows year-wise balance, total investment, interest earned and maturity value. Adjust yearly deposit and rate to match your plan — free on Master Calc.
FAQ
Can I open PPF for my child? Yes, in the child's name with a guardian. Combined 80C limit still applies to the depositor.
Is PPF better than FD? PPF offers tax-free maturity and 80C benefit; FD is more flexible for short tenure. Goals and liquidity needs decide the choice.
Disclaimer: PPF rules and rates change. Verify with official sources before investing.