PPF Calculator

The PPF interest rate is set by the Ministry of Finance, India, and reviewed quarterly (though it has been unchanged at 7.1% since April 2020). It is based on a spread over 10-year government bond yields. At 7.1% compounded annually with EEE tax status, PPF significantly outperforms FDs on a post-tax basis. For someone in the 30% tax bracket, 7.1% tax-free is equivalent to earning approximately 10.1% from a taxable FD (7.1 / (1 - 0.30) = 10.14%). The rate is guaranteed by the Government of India - making PPF one of the safest fixed-income instruments available to retail investors. Monitor the NSSF notification each quarter if you are tracking rate changes.

PPF has a mandatory 15-year lock-in from the date of account opening. However, partial access is available before maturity. From the 7th financial year onward, you can make one partial withdrawal per year of up to 50% of the balance at the end of the 4th year or the year immediately before the withdrawal year, whichever is lower. From the 3rd to the 6th year, you can borrow against the PPF balance as a loan (at 1% above PPF rate). After 15-year maturity, you can close the account and withdraw fully, extend for 5 years without contributions (balance keeps earning interest), or extend with fresh contributions - indefinitely in 5-year blocks. This flexibility makes PPF suitable as both a retirement and medium-term savings vehicle.

The annual PPF investment limit is ₹1,50,000 per account per financial year (April to March). You can make up to 12 deposits in a year - there is no requirement for a single annual deposit. The minimum annual contribution is just ₹500; missing this causes the account to become dormant, which can be revived by paying a ₹50 penalty per dormant year plus the minimum ₹500. Strategically, depositing the full ₹1,50,000 at the start of April (before the 5th of the month) ensures you earn interest for the entire year on that amount. PPF interest is calculated on the minimum balance between the 5th and last day of each month - so money deposited before the 5th earns interest for that month, after the 5th does not.

Yes, PPF enjoys EEE (Exempt-Exempt-Exempt) tax status - the most favourable tax treatment for any investment in India. All three stages are tax-free: your annual contribution of up to ₹1,50,000 is deductible under Section 80C, reducing your taxable income; the interest credited each year is completely exempt from income tax; and the maturity amount on withdrawal is entirely tax-free. This compares favourably to FD (interest fully taxable every year), mutual funds (LTCG at 12.5% on equity gains above ₹1.25 lakh), and even NPS (only 60% of corpus is tax-free on withdrawal, rest goes to taxable annuity). For long-term risk-averse investors, no other instrument combines guaranteed returns with full EEE tax status.

Yes, PPF loans are available from the beginning of the 3rd financial year to the end of the 6th financial year of account opening. You can borrow up to 25% of the balance at the end of the 2nd year preceding the loan application. Interest rate is 1% per annum above the PPF rate - currently 8.1% (7.1% + 1%). The loan must be repaid within 36 months; if not, the interest rate rises to 6% above PPF rate. While a loan is outstanding, the PPF balance continues to earn interest normally - making this an extremely low-cost personal loan secured against your own savings. A fresh loan can be taken after the first is fully repaid. This is useful for short-term cash needs without disrupting the compounding trajectory of the account.

At the 15-year maturity mark, you have three choices. First, close the account and withdraw the entire tax-free corpus. Second, extend without fresh contributions: the account stays active, earns PPF interest, and you can withdraw in lump sums - useful if you do not need the money immediately but also do not want to lock in more funds. Third, extend with fresh contributions for another 5-year block: you continue depositing up to ₹1.5 lakh per year, the 80C deduction continues, and the EEE status continues. This third option is highly valuable for pre-retirement investors who have not exhausted their 80C limit elsewhere. Many advisors recommend keeping PPF going indefinitely since guaranteed 7.1% tax-free is hard to beat for the debt portion of a retirement portfolio.

Yes. A PPF account can be opened for a minor child by a parent or legal guardian. However, the combined annual deposit limit across the guardian's own PPF account and the minor's account is Rs. 1.5 lakh - not Rs. 1.5 lakh each. Contributions to the minor's account qualify for the guardian's Section 80C deduction. The account is managed by the guardian until the child turns 18, after which the child becomes the account holder. Interest at 7.1% accrues from opening, and the EEE tax status applies. Since PPF matures 15 years from opening, starting a child's account at birth means the corpus is available when the child is 15 - useful for higher education expenses.