PPF calculator

The PPF calculator is an online financial tool that estimates the future value of an individual's PPF contributions. The PPF calculator is helpful for investors who have a low-risk appetite and want to earn stable results throughout an investment period.

Using the online PPF calculator, you can assess the performance of the capital kept in a PPF account for a minimum period of 15 years. This lets you decide whether opening a PPF account and investing in it is a feasible option for you or not.

What is a Public Provident Fund (PPF)?

The PPF scheme was established under the Public Provident Fund Act 1968. It is a government-backed scheme for long-term investors with a low-risk profile. PPF is a scheme that offers relatively stable returns because it is not linked to market performance. Hence, it is one of the most sought-after options among low-risk investors.

The scheme has a lock-in period of 15 years, which means that investors' money will be parked for an extended tenure. It assists investors in creating a significant corpus for a stable financial future through long-term interest generation. The Public Provident Fund also offers tax deductions on deposits and tax-free interest income under Section 80C of the Income Tax Act, 1961.

Under the PPF scheme, a contributor has to make a minimum investment of ₹ 500 and a maximum investment of ₹1,50,000 in a financial year. However, there is no limit on the number of contributions made in a year, but the total investment can not exceed the amount of ₹1,50,000 in a year. All these aspects of PPF might seem overwhelming and complex. Therefore, you must resort to the use of PPF calculators to ease your PPF investment journey.

What is the PPF Calculator?

The online PPF calculator is a financial tool that lets you calculate the projected return on your PPF contributions and estimate the value of your corpus at maturity. The primary aim of a PPF interest calculator is to help investors analyse the feasibility of the public provident fund (PPF) as a potential investment avenue.

How Does a PPF Calculator Work?

The best PPF calculator offers a fixed interest rate to its contributors, which is modified by the Ministry of Finance quarterly. An online PPF calculator provides results based on the inputs that you provide. These inputs include the contribution amount, investment tenure, and contribution frequency.

Once you enter all these values in the PPF return calculator, it provides key outputs, which include the total investment value, interest amount, and maturity value. Thus, using the PPF calculator, you assess how much your PPF account will be worth at the end of the maturity period (15 years).

What is the PPF Calculator Formula?

The output of the PPF calculator is calculated using the following formula:

PPF Formula = P [ ( { (1 + i) ^ n } - 1 ) / i]

A PPF account calculator uses this formula to project the estimated future value of your PPF contributions. Here, (P) is the principal amount invested annually, (i) is the fixed interest rate, and (n) is the number of years for which the contribution is made.

Example of a PPF calculator

To understand how a PPF account calculator works, let us have a look at a hypothetical illustration. Suppose Aman invests ₹2,00,000 for 20 years a PPF scheme at an interest rate of 7.1%. Then, how much is his portfolio worth on maturity?

Using the best PPF calculator, we can get the following answers: 

Total Investment - ₹30,00,000

Estimates Interest - ₹36,58,288

Maturity Value - ₹66,58,288

Note - “Try the Univest PPF Calculator now to get your exact PPF maturity value!”

How Can A PPF Calculator Help You?

A PPF interest calculator can help you in many ways, assisting in building a solid and stable portfolio for a secure financial future. Learn more about the benefits of the Public Provident Fund calculator in the points below:

• Future Value Projection
  The best PPF calculator aims to give you an accurate picture of your investment's value at the end of the maturity period. It helps you make well-informed decisions and build a strong portfolio.
• Diversification
  The PPF is a fixed interest scheme, which makes it relatively less risky and favourable for investment diversification. Therefore, using the PPF account calculator, investors can gauge the future performance of their PPF account and diversify their portfolios.
• Comparative Analysis
  The outputs of the best PPF calculator can be used to compare different investment options and decide on investing your money in the best option.
• Investment Optimisation
  PPF account calculators offer you the feature to test different scenarios by changing the calculator inputs. By doing so, you can analyse the various opportunities and optimise your investment strategy per your needs.

What is the Univest PPF Calculator?

The Univest PPF calculator is one of India's most sought-after PPF account calculators. This calculator helps you compute the value of your PPF account until the maturity period. With a customisable tenure limit up to 50 years, Unviest allows you to project your interest for the long term.

How can I use the Univest PPF Calculator?

You can use the PPF account calculator by accessing it through the web and providing suitable inputs as per your requirements. Read the guide below to learn more about the steps to use the online PPF calculator.

Steps to Use The PPF Calculator

Step 1 - Access the PPF Calculator on the home page of Univest Web.

Step 2 - Insert the inputs (investment tenure and amount) once the PPF account calculator is visible.

Step 3 - As you complete the above two steps, you will see the outputs from the PPF calculator.

Step 4 - Now, change the values of the inputs to test different scenarios and results.

Drawbacks of a PPF Calculator

Besides all the benefits a public provident fund calculator offers you, it also has disadvantages. One of the primary disadvantages is the quarterly interest changes. As the Ministry of Finance revises the PPF interest rates every quarter, it can lead to variation in the actual return you receive compared to your estimated returns.

Secondly, the outputs given by a PPF interest calculator are estimated figures that can change during the investment period. Hence, your overreliance on the results of the PPF calculator may not be the right approach.

Lastly, not include the changing inflation rate in the actual PPF interest calculation. The interest value returned by a PPF account calculator is a gross value. It means that the estimated returns are not adjusted for inflation, which can significantly decrease your real earnings.

Features of the Pubic Provident Fund (PPF) Scheme

• Government-Backed Scheme
  The public provident fund is a saving-cum investment scheme launched by the Indian government. The government's backing builds trust among the PPF contributors, further increasing the participation.
• Low Risk
  This scheme has a low risk profile since the returns are not linked to the stock market. A fixed rate of interest (revised quarterly) attracts investors with a low risk appetite.
• Long-Term Suitability
  As already mentioned, PPF account investments have a minimum lock-in period. It means you cannot withdraw your money for 15 years. This makes the scheme suitable for long-term investors, who wish to create wealth through their capital.
• Tax-Free
  The PPF scheme offers various tax benefits to its subscribers. The deposits made in PPF qualify for tax deductions u/s 80C, and the interest portion is free from tax u/s 10 of the Income Tax Act.
• Low Capital Investment
  The public provident fund is a cost-effective way to build long-term wealth. It allows you to invest your money with as little as Rs 500, making it less capital-intensive and accessible to all.
• Fixed Returns
  PPF account holders get a fixed interest rate over the investment period. This enables the contributors to receive stable returns on their invested capital.

Disadvantages of Public Provident Fund (PPF) Scheme

• Low Returns
  Interest provided by the Public Provident Fund Scheme is relatively lower than other investment schemes. Currently, it offers an interest rate of 7.1%, which may not be lucrative for many investors, given the number of high-interest-paying schemes available in the market.
• Lock-in period
  A PPF account might be discouraging to many individuals because of its minimum lock-in period of 15 years. Such a long lock-in period may lead to the inability to withdraw funds in times of emergency.
• Liquidity
  Due to an extended lock-in period, investors can find it difficult to withdraw their funds from their PPF account in emergency situations. However, the schemes allow partial withdrawals, but that is also possible when the account has been active for more than 5 years.
• Investing Limit
  PPF scheme only allows annual investments within the range of ₹ 500 to ₹ 1,50,000. It means that investors can not invest more than a total of ₹ 1,50,000 in PPF in a year.

Conclusion

• The Public Provident Fund Scheme is an saving-cum investment scheme launched under the Public Provident Fund Scheme 1968. 
• The scheme offers a fixed interest rate to investors. This interest rate is revised by the Ministry of Finance on a quarterly basis. 
• The best PPF calculator is a financial tool that computes the future value of your current contribution based on the fixed interest rate. 
• Investors use the PPF return calculator to analyse the future performance of their investments in the PPF scheme. 
• Suppose you are confused about which public provident fund calculator to choose. Then you can use the PPF account calculator to estimate the interest in this scheme.