What is the PPF?
The Public Provident Fund (PPF) is a 15-year government-backed savings scheme with a rare EEE tax status: the deposit is deductible under Section 80C (old regime), the interest is tax-free, and the maturity amount is tax-free. The rate — currently 7.1% p.a., compounded yearly — is set by the government every quarter.
You can invest ₹500 to ₹1.5 lakh per financial year, in lump sum or instalments. After 15 years the account can be extended in 5-year blocks (with or without fresh deposits), which is how patient savers turn PPF into a ₹1-crore tax-free corpus.
Formula & worked example
With a deposit D at the start of each year and rate r:
Worked example: ₹1,50,000 every year at 7.1% for 15 years → total deposits ₹22.5 lakh, maturity ≈ ₹40.68 lakh, of which ₹18.18 lakh is completely tax-free interest. Extend the same account (with deposits) to 25 years and the corpus crosses ₹1.03 crore.
Note: officially, interest is credited on the lowest balance between the 5th and month-end; deposit before the 5th of April (or of each month) to earn the full year\u2019s interest — this calculator assumes you do.
How to use this ppf calculator
- Enter your planned yearly deposit (max ₹1.5 lakh per year).
- Keep the current 7.1% rate or test other rates — the government revises it quarterly.
- Slide the period past 15 to model 5-year extensions and watch tax-free compounding accelerate.
Smart tips
- Deposit before April 5th each year — a full year of interest on the whole amount versus dribbling it monthly is worth thousands over 15 years.
- PPF pairs perfectly with equity SIPs: PPF is your safe, tax-free debt allocation; SIPs chase growth.
- Partial withdrawals are allowed from year 7, and loans against balance from year 3 — the lock-in is softer than it looks.
- Open an account for your spouse or child to raise the family\u2019s combined tax-free limit beyond ₹1.5L/yr.
- Never let a year lapse — a ₹500 minimum keeps the account active; reviving a discontinued account costs penalties and lost compounding.
Frequently asked questions
Is PPF interest really tax-free?
Yes — PPF is fully EEE: the contribution qualifies for Section 80C (old regime), and both the yearly interest and final maturity are exempt from income tax. A 7.1% tax-free return equals roughly a 10.2% pre-tax FD for someone in the 30% bracket.
Can I withdraw PPF money before 15 years?
Partially, yes: from the 7th financial year you may withdraw up to 50% of the balance at the end of the 4th preceding year, once a year. Premature full closure is allowed after 5 years only for specific reasons (medical, education) with a 1% rate cut.
What happens after 15 years?
Three choices: withdraw everything tax-free, extend 5 years with fresh deposits (submit Form H within a year), or extend without deposits — the balance keeps compounding tax-free and one withdrawal a year is allowed.
Can I invest more than ₹1.5 lakh in PPF?
No — ₹1.5 lakh per financial year is the ceiling across your own and minor children\u2019s accounts you fund. Excess deposits earn no interest and are refunded. A spouse\u2019s separate account has its own limit.
Is PPF better than an FD?
For 15-year money, usually yes: PPF\u2019s rate is comparable to top FDs, but its interest is tax-free while FD interest is taxed at slab. FDs win for short horizons and liquidity.
Want the theory behind the numbers? Read our savings guides on the Money Blog.