How To?

PPF Interest Rate: How to Calculate Returns

Personal Finance

Saving money is the starting point for any financial plan. You have a wide variety of savings accounts available. However, you should prioritise those that provide substantial returns without the associated risk. One of the most common additions is a personal retirement fund (PPF) account. Due to the difficulty in estimating the PPF return without a PPF calculator, it is recommended that you use one. Online PPF calculators work by putting in inputs (investment amount, starting balance, and interest rate) to determine the total value of your investment after a particular number of years.

Public Provident Fund 

PPF exists with the sole aim of spurring savings. PPF’s goal is to make a fund with good returns and a tax rebate. It helps one build a retirement corpus. As per recent data, the rate of interest for PPF is 7.1%. To spur the habit of saving, the Indian government has pledged PPF, so there’s almost no danger in funding it. Moreover, its interest, principal, and balance are all exempt from tax. 

How Does a PPF Calculator Work?

  • If you have a PPF, then you must be curious to know the amount of funds deposited to date. In the past, this computation was more complex, and an expert was needed to know the balance and study the results.
  • The PPF calculator expedites the process of several calculations. Changing interest rates, which are changed every three months, are considered. Using the input you provide, it calculates the result.
  • When you invest in something, that is also very important. When a deposit is made on the first day of the month, interest is applied for the entire fiscal year.
  • The calculator will account for the lower interest rate that applies to deposits made after the fifth of the month.

The Best Way to Utilize the PPF Calculator

PPF calculators are helpful financial tools that help you calculate PPF returns. The PPF calculator is accessible in several formats. It’s possible that you can come across some of the following types of modes:

  • Fixed and Variable Amounts for the Whole Year
  • Fixed and Variable Amount for the whole month

How to Calculate Expected Returns from PPF?

To calculate the PPF return, there is a formula that gives the correct result. The formula is as follows :

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


  • Amount of Maturity is denoted by A
  • The amount of principal invested is denoted by
  • The rate of interest is denoted by i
  • The tenure for which the amount in PPF is invested, is denoted by n

Tax Benefits of Investing in PPF

PPF falls under the category of EEE, which means “thrice exempt” from being taxed. Any individual saving under PPF can claim a full tax rebate under Section 80C of the Income Tax Act. But remember, you can’t put more than Rs. 1.5 lakh into your PPF in a single fiscal year. The collected principal plus any interest earned are also tax-free at the time of withdrawal. You can’t get the money out of your PPF account until it matures. However, a PPF account holder can be changed. Be mindful, though, that a PPF account cannot be terminated before its tenure. The nominee can only request that the account be closed if the account holder dies.

Benefits of Using a PPF Calculator

Using a PPF calculator is very easy. Especially for first-time investors, it can be very useful. If you are starting now, you can benefit greatly from making use of a free online PPF calculator to estimate the ROI.

Calculating how much you should invest each year to meet your financial goals is simplified.

Because the PPF calculator is automated, you may use it to better plan your tax-saving investment and make the most of your money.

Post Office PPF Account

A post office PPF account is similar to a PPF account. The features of a post office PPF account have the following attributes:

  • In a given fiscal year, you can put up to Rs. 1.5 lakh into your PPF account.
  • A post office PPF can only receive a maximum of 12 annual deposits.
  • The money you put into your PPF, any income you make, and any money you withdraw at maturity are all exempt from taxes because it is an EEE (EEE) investment.
  • You must deposit at least Rs. 500 per year, to keep PPF active.
  • Post office PPF accounts accrue interest on a yearly basis, and that interest is compounded and distributed on March 31 of each year.

A PPF Account is Preferred at a Bank or a Post Office?

The PPF benefits can be reaped at both banks as well as post offices. The features of the PPF plans are the same whether you create an account at a bank or a post office. Both options for creating an account can be considered secure and user-friendly. It’s important to remember that, just like banks, post offices now provide internet access for members to their PPF and other government savings programme accounts.

Steps to Use the PPF Calculator:

  • The first step is to input the amount of the annual investment or adjust the slider for the desired amount 
  • Tenure of your investment
  • After all the details are put in, the PPFO calculator will give you details like interest levied, total funding, and the value at the time of maturity.

Benefits of Using the Postal PPF Calculator

  • It provides an idea of what you will receive in exchange for your funding.
  • It assists in analysing the net investment for any given financial year.
  • The PPF calculator at the Post Office helps investors get an estimate of their ROI quickly. 

Points to Note: PPF Calculation

You must note a few major points while calculating PPF. They are as follows :

  • The highest amount you can invest annually is Rs. 1.5 lakh.
  • An annual minimum of Rs. 500 is required to open a PPF account.
  • The compounding of interest occurs annually at the end of the fiscal year.
  • The maturity period is 15 years, and the proceeds are completely tax-free. 
  • The Finance Ministry may announce quarterly changes to the PPF interest rate. The PPF interest rate is subject to change every quarter.


The PPF is a convenient way to save for retirement. It requires little effort on the part of the investor. It’s the safest form of investment. It’s a good retirement plan or other long-term funding source. It is preferred because of the tax relief under Sec. 80C. Even if you know the formula, manually calculating is tedious. You’ll be making multiple contributions over time. As a result, a PPF calculator available online can be a great help and ease the whole process. For further details, visit the Piramal Finance website and get assured assistance.