Investing in India is no longer just about short-term returns or saving for emergencies. Today, people seek safe, reliable financial instruments that build long-term wealth with guaranteed returns.
The Public Provident Fund (PPF) has been one of the most trusted investment choices for millions of Indians—salaried employees, self-employed individuals, homemakers, and even parents investing for their children.
This guide explains what PPF is, how it works, its rules, benefits, and how you can calculate your maturity value using a PPF calculator step by step.
What is PPF?
Public Provident Fund (PPF), launched in 1968 by the National Savings Institute under the Ministry of Finance, is a long-term savings scheme backed by the Government of India.
You can claim the deposited amount as a deduction under Section 80C up to ₹1.5 lakh annually.
PPF is popular because it helps diversify your portfolio and provides tax-free returns.
- Minimum investment: ₹500 per year
- Maximum investment: ₹1.5 lakh per year
- Lock-in period: 15 years (extendable in 5-year blocks)
Even if a court orders asset attachment for liabilities, a PPF account cannot be seized or attached. The balance is completely protected by law.
Formula for PPF Maturity
The maturity amount is calculated as:
- M = Maturity Amount
- P = Annual Investment
- r = Annual Interest Rate (decimal)
- n = Number of Years
How Does PPF Work?
- Investment Amount: Choose how much to invest annually.
- Interest Rate: Declared every quarter (e.g., 7.1%).
- Tenure: 15 years, extendable in blocks of 5 years.
- Compounding: Annual compounding helps your money grow faster.
PPF Rules
- Minimum deposit: ₹500 per year
- Maximum deposit: ₹1.5 lakh per year
- Interest rate: 7.1% (subject to quarterly revision)
- Lock-in period: 15 years
- Partial withdrawals: Allowed after 7 years
- Loan facility: Available from 3rd to 6th year
PPF Example
Suppose you deposit ₹1,00,000 every year for 15 years at a rate of 7.1%.
- Total Investment: ₹15,00,000
- Total Interest Earned: ~₹12,12,139
- Maturity Amount: ~₹27,12,139
This means your money almost doubles—and all returns are tax-free.
Benefits of PPF
- Tax Saving: Eligible for ₹1.5 lakh deduction under Section 80C.
- Long-Term Savings: Encourages disciplined wealth creation.
- Government Backed: Zero risk of default.
- Attractive Returns: Higher than bank FDs.
Eligibility Criteria for a PPF Account
- Resident Individuals: Salaried or self-employed can open PPF.
- Minors: Parents/guardians can open on behalf of children.
- Joint Accounts: Not allowed.
- HUFs & NRIs: Cannot open fresh accounts.
What is a PPF Calculator?
A PPF calculator helps you estimate your maturity amount by entering:
- Annual investment amount
- Tenure (minimum 15 years)
- Interest rate (e.g., 7.1%)
How to Use a PPF Calculator
- Enter your yearly investment.
- Enter the interest rate.
- Enter the tenure.
- Click Calculate to get maturity amount and interest earned.
