PPF calculator

How PPF interest is credited

Interest is calculated on the lowest balance in your account between the fifth and the last day of each month, and credited once a year on 31 March. The practical consequence is a date: money deposited before 5 April earns interest for the full financial year, money deposited on 6 April earns nothing for that month. Over fifteen years that timing is worth a noticeable amount.

This calculator assumes the full yearly deposit is made at the start of each year, which is the best case and matches a deposit made before 5 April. Spreading the same amount across twelve monthly instalments produces slightly less.

The rate is not fixed for the term

Unlike a fixed deposit, the PPF rate is set by the government and reviewed every quarter. It has been 7.1% since April 2020, but it has been as high as 12% historically and it can be cut. A fifteen-year projection at today's rate is a reasonable planning figure and not a guarantee — which is why the rate above is an editable field rather than a fixed number.

Why the tax treatment is the real attraction

PPF is one of the few remaining exempt-exempt-exempt instruments in India: the deposit qualifies for a deduction, the interest is not taxed as it accrues, and the maturity amount is tax free. For someone in the highest slab, a tax-free 7.1% is equivalent to well over 10% from a taxable deposit. That comparison, rather than the headline rate, is what makes the scheme worth its fifteen-year lock-in.

Withdrawals and loans before maturity

The account is not entirely frozen. A loan is available between years three and six, and partial withdrawal is permitted from year seven, capped at half the balance from four years earlier. Full closure before fifteen years is allowed only in specific circumstances — serious illness, higher education, change of residency status — and carries an interest penalty.

Frequently asked questions