Post Office PPF calculator

What is a Post Office PPF Calculator?

A Public Provident Fund (PPF) calculator is an online long-term investment tool designed to help investors calculate the potential returns and growth of their investments in a PPF account.

It provides an estimate of the maturity amount received over time by taking into account three variables, i.e., yearly investment, interest rate, and period (in years).

If you are planning to invest in PPF and are not sure how much to invest or how much returns you may get on investing a certain amount, our PPF calculator is here for you. 

By using a PPF calculator, you gain a clear understanding of the future value of your PPF investments, make informed financial decisions, and effectively plan your savings. Once you decide the amount you can afford to invest on a regular basis, the calculator considers the tenure to be 15 years and the prevalent interest rate to calculate the returns.

How Does Post Office PPF Calculator Work?

You can follow the easy steps mentioned below to use the PPF calculator and calculate expected returns from post office PPF investments accurately:

• Select the frequency of investment: The frequency of your investment will influence your maturity value. Ideally, select the ‘Monthly’ option in case you are salaried for more convenient investment and accurate results.
• Enter the monthly PPF investment: It is the amount you wish to invest in the PPF account. You could input a monthly, quarterly, semi-annual, or annual amount. Also, ensure that your investment amount is not more than Rs 12,500 per month or Rs 1.5 lakh a year.
• Interest rate: The current interest rate for PPF investment will be auto-populated. Thus, you do not need to enter the interest rate. 
• Select the investment duration: It is the time you will continue your PPF investment. The minimum time available is 15 years, and you have the option to extend the term in batches of five years after that. The PPF calculator assumes that you will be investing the same amount till the time of maturity.

Check the future value:  Once you enter all the above details, our calculator will automatically show the maturity amount. 

What is the Post Office PPF Calculator Formula?

The Post Office PPF Returns can be calculated using the following formula:

M = P [({(1+ i) ^ n} – 1) / i]

In which,

M = Total maturity value by the end of the investment period

P = Amount of money contributed annually to the PPF account

i = PPF interest rate in post office

n = Total number of years until maturity

Example of Post Office PPF Calculation

You can invest a maximum of up to 1.5 lakh per financial year in a SBI PPF account. Suppose, you invest Rs 1.5 lakh a year at a 7.1% interest rate; the contribution during that period will be Rs 22,50,000.

The scheme provides compound interest, which will be Rs 18,18,209 in 15 years, which is the maximum duration one can invest. After the completion of the PPF scheme, the maturity amount will stand at Rs 40,68,209.

Furthermore, after completing a maximum duration of 15 years, one can get extensions for further blocks of five years and continue investing.

After completing the first five-year extension, the investment will rise to Rs 30,00,000. The interest received will be Rs 36,58,288, and the maturity value will be Rs 66,58,288.

Additionally, an individual can opt for another extension of five years. The total investment will be for 25 years, in which the investment amount is Rs 37,50,000, the interest will be Rs 65,58,015, and the total corpus will be Rs 1,03,08,015.

How can a Post Office PPF Calculator Help You?

The PPF post office calculator estimates the maturity value for a given amount invested in PPF. Estimating the returns earned at the end of the investment period helps you gain insight into whether the chosen investment option optimally aligns with your financial goals.

You don’t have to engage in complicated calculations as the post office PPF calculator considers the investment amount, period, and interest rate to provide an accurate estimate without the possibility of human error. 

Benefits of Using a Post Office PPF Calculator

Here’s why you should use a PPF calculator:

• Plan your investments: It helps you visualise how your PPF grows, thus helping you plan your contributions to reach desired financial goals, which could be building a retirement corpus, children’s education, marriage, etc.
• Compare investment options: You can compare PPF returns with other options, such as bank deposits, helping you make informed financial decisions.
• Maximise your contributions: It will help you effectively utilise the full Rs.1.5 lakh annual limit by understanding how different contribution frequencies impact returns.
• Track your progress: You can monitor your PPF’s growth over a period, keeping you motivated enough to remain on track to meet your financial goals. 

Post Office PPF Interest Rate

Post office PPF is a government-backed scheme. The interest rate is maintained uniformly across all post offices and banks that offer the scheme. The current applicable post office PPF interest rate is 7.1% for Q1 2024-25 (1 April - 30 June 2024). Overall, the PPF rates have remained unchanged since April 2020.

Tax Benefits of Post Office PPF Investments

The Post Office PPF investment scheme falls under the Exempt-Exempt-Exempt (EEE) category, where deposits, interest earned, and the maturity amount are tax-free. 

That means that you can claim a tax exemption under Section 80C of the Income-Tax Act (ITA), 1961, on investment of up to a maximum limit of Rs 1.5 lakh annually, tax exemption on interest earned, and the amount received on maturity.