What is PPF And How to Calculate it Online?

Personal Finance

Public Provident Fund (PPF) is financial security for life after retirement and is suitable for a long-term stable investment. It is a powerful tool for investment and savings, making it the most preferred savings option among Indians, mainly because of the government’s intervention. Read this article to understand Public Provident Fund and how to calculate it online using a PPF Calculator.

What exactly is a Public Provident Fund (PPF)?

Public Provident Fund (PPF) was first introduced in India in the year 1968. The PPF scheme is guaranteed fully by the Central Government of India. For this reason, it is regarded as the most secure option for investment in the nation. Public Provident Fund is also called savings-cum-tax savings investment.

What is a PPF Account and What are its Features?

PPF Account

When you choose to invest in the PPF scheme, a PPF account is created. In this account, the money you invest every month is deposited. The interest is also compounded. A PPF account can be opened with participating institutions like post offices or banks.


  • Principal: Principal amount is the amount you invest in the PPF account. It can range from INR 500 to 1,50,000 for a year.
  • Deposition of the Principal Amount: You can deposit this principal amount partly or as a whole. You can also opt for monthly payments.
  • Minimum Deposits: You must deposit mandatorily at least once a year into your PPF account.
  • Interest Rate: The interest rate for PPF is 7.1 % p.a. This interest rate is fixed by the Finance Ministry every year. In most cases, the PPF is not influenced by inflation (general rise of prices).
  • Lock-in Period: The amount you deposit in the PPF account can’t be withdrawn for 15 years.
  • Lock-in Period Extension: You can also extend this 15-year period by 5 years. But it is entirely optional.
  • Nominee: A PPF account allows you to add a nominee by option.
  • Loan on Investment: You can avail of a loan for the principal that you invest. But it is allowed only from the 3rd year to the 5th year of the account opening.
  • Account Closing: You may close the PPF account whenever you want. But you can do it only after 5 years of opening the account.

What are the Eligibilities to Open a PPF Account?

  • Indian Citizens: A PPF account can be opened only by an Indian citizen.
  • NRIs: Non-Residential Indians (NRI) cannot open. But, if an NRI already has a PPF account, it will be accepted. However, the 5-year extension period does not apply to NRIs.
  • Minors: PPF accounts can also be opened in the name of a minor. But their parents should operate the account.

What are the Documents Necessary to Open a PPF Account?

The documents necessary to open a PPF account are:

  • Passport Size Photograph
  • Account Opening Form
  • KYC Documents
  • Address Proof
  • Declaration Form (filled by the applicant)

How to Calculate PPF Online?

PPF Calculation

The formula used to calculate the Public Provident Fund and its maturity rate is as follows.

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


A- Amount you get at the maturity period.

P- Principal amount you invest in the PPF account.

I- The interest you get as a return for the PPF.

n- Total period for which you make the PPF investment.


A person X plans to invest INR 10,000 for a year in their PPF account.

The total period for the PPF account is 15 years.

The rate of interest is 7.1 %.

So, at the end of the PPF investment (15-year period), they will get

  • Total Investment: 1,50,000
  • Total Interest: ₹1,21,214
  • Maturity Amount: ₹2,71,214

How to use the online PPF Calculator?

  • Using our online PPF Calculator is as simple as eating chocolates.
  • First, it will ask you to enter the amount you plan to invest for a year and the period.
  • It will then calculate your interest. Now you will get to know your maturity amount.
  • Note: The interest is subject to changes. It is fixed every year by the Ministry of Finance.

Benefits of Using an online PPF Calculator

Making calculations is not easy for everyone. You may get errors in manual calculations. Our online PPF Calculator is an error-free tool for your PPF calculation. It will give you an exact figure for you to invest.

Benefits of Public Provident Fund (PPF)

  • Secure Option: For PPF, the government guarantees the investment. As the government is involved, it is one of the safest investments. Security is one of the most popular advantages of the Public Provident Fund.
  • Higher Interest Rate: The interest rate for the Public Provident Fund (PPF) is higher when compared to fixed deposits. This is because the authority to fix the interest rates lies with the government.
  • Flexible Deposits: Depositing in a PPF account is very flexible. You can deposit via cash, cheque, demand draft (DD), or online mode.
  • Flexible Number of Deposits: The number of deposits you make does not matter. You can deposit as many times as you need.
  • Emergency: If you have an emergency, you can partially withdraw the principal. But it is possible only from the 7th year of the account opening.
  • Tax Exemption: The greatest benefit is the tax exemption. As per section 80C of the Income Tax Act (ITA), the PPF is exempted from tax. The returns from PPF are also tax-free.

The Bottom Line

Open a PPF account and live a happy life after retirement! Our user-friendly PPF Calculator will make your job easier. If you have any doubts, consult Piramal Finance. Our expert team will help you through the entire process.