Calculate the maturity amount of your government-backed, tax-free PPF savings. Compounded annually.
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Total Interest Earned
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Expected Maturity Corpus
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Invested Principal
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Interest Earned
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What is the Public Provident Fund (PPF)?
The PPF is a highly secure, government-backed long-term savings scheme in India. It comes with a mandatory lock-in period of 15 years, though partial withdrawals and loans against the balance are permitted under specific conditions.
The 'EEE' Tax Benefit
PPF belongs to the coveted 'Exempt-Exempt-Exempt' (EEE) tax category. The amount you invest (up to ₹1.5 Lakh) is exempt under Section 80C, the interest earned every year is tax-free, and the final maturity amount is completely exempt from income tax.
How PPF Interest Works
The government reviews the PPF interest rate quarterly. However, interest is calculated monthly on the lowest balance between the 5th and the last day of the month, and it is compounded annually at the end of the financial year.
The Public Provident Fund (PPF) is a sovereign-backed, long-term savings scheme introduced by the Government of India. It is widely considered the ultimate debt investment due to its unparalleled tax benefits and guaranteed safety.
The 'EEE' Tax Exemption
The primary allure of the PPF is its "Exempt-Exempt-Exempt" (EEE) status.
1. The amount you invest (up to ₹1.5 Lakhs per year) is exempt from tax under Section 80C.
2. The interest earned every year is completely tax-free.
3. The final maturity corpus after 15 years is entirely exempt from income tax.
Very few financial instruments in India enjoy this level of tax protection.
Lock-in Rules and Extensions
A PPF account has a strict 15-year lock-in period, making it a true long-term retirement tool. However, partial withdrawals are permitted from the 7th year onwards under specific conditions (like medical emergencies or higher education). You can also avail of a loan against your PPF balance between the 3rd and 6th years.
Upon maturity at 15 years, you can extend the account indefinitely in blocks of 5 years, with or without making further contributions, while continuing to earn tax-free interest.
The Secret to Maximizing PPF Returns
The government sets the PPF interest rate quarterly. However, the interest is calculated monthly on the lowest balance between the 5th and the last day of the month. Therefore, to maximize your returns, you must ensure your PPF contribution (whether monthly or lumpsum) is deposited into the account on or before the 5th of the month. If you deposit it on the 6th, you lose the interest for that entire month!
Frequently Asked Questions (FAQs)
The current PPF interest rate is 7.1% p.a., compounded annually. The rate is set and reviewed quarterly by the Government of India.
EEE stands for Exempt-Exempt-Exempt: your contributions, interest earned, and final maturity corpus are completely exempt from income tax.
Interest is calculated monthly on the lowest balance in your account between the 5th and the last day of the month.
Always deposit contributions on or before the 5th of the month (or April 5th for annual deposits) to maximize interest earnings.
PPF accounts have a mandatory lock-in period of 15 years. You can extend it indefinitely in blocks of 5 years.
The maximum contribution allowed is ₹1,50,000 per financial year under Section 80C.
A minimum deposit of ₹500 is required every financial year to keep the account active.
Partial withdrawals are allowed from the 7th financial year onwards, subject to specific limits based on your balance.
Yes, premature closure is permitted after 5 years for serious medical emergencies or higher education, subject to a 1% interest penalty.
In the event of the account holder's death, the nominee can withdraw the entire corpus completely tax-free.