PPF calculator
Best PPF calculator online
Ensure accurate maturity projections
Total Value
₹2,71,214
Yearly investment
Time period
Rate of interest
Your interest
0.0%
Invested Amount
Interest
*This amount is calculated on 15% p.a. for the span of 7 yrs.
Invested Amount
₹1,50,000
Interest
₹1,21,214
Maturity Value
₹2,71,214
Your returns compared with Univest
Univest Elite
₹2174722
Others
₹271213
Overview of public provident fund (PPF)
Benefits of public provident fund (PPF)
Investing in the Public Provident Fund in India has significant advantages for investors. Some of them are as follows:
- Tax benefits: PPF is a tax-efficient investment because contributions made to these schemes are eligible for deductions under Section 80C of the Income Tax Act 1961. There is a triple tax benefit available, which means that the contributions made to the PPF scheme, the amount of interest earned on these contributions and the maturity amount are tax deductible. Thus, investors can avail of these tax benefits of the PPF schemes.
- Compounded Returns: The returns on PPF investments are compounded on an annual basis. Due to the benefit of the power of compounding, these returns are amplified, leading to a significant growth in the principal amount invested. The power of compounding means that the returns earned during a financial year are reinvested in the PPF scheme, thus increasing the principal amount of investment and the returns earned.
- Safe investment option: PPF is an investment option that is backed by the government and ensures the safety of the principal amount invested, thus offering investors a secure platform to save. This sense of security builds confidence among the investors with respect to the stability of their investments.
- Attractive Interest Rates: PPF offers competitive interest rates that are set by the government, which can even surpass the returns offered on a traditional savings account. Thus, investors can enhance the overall returns on their investment and have a competitive edge over other investment avenues.
- Liquidity through Partial Withdrawals: PPF schemes ensure liquidity by allowing partial withdrawals from the 7th financial year onwards. This facility is granted to maintain a balance between active investments and provide a buffer to investors in the case of unforeseen circumstances.
- Goal-Based Investing: Investment in PPF schemes cater to a diverse range of financial objectives like retirement planning of individuals, education funding of children, etc. Thus, it serves as a versatile investment option for investors with varying financial goals.
- Hedge against Inflation: Inflation reduces the purchasing power of funds. However, PPF investments are capable enough to withstand the effects of inflation by ensuring a competitive rate of interest as compared to other investment avenues available.
- Minor accounts permitted: PPF schemes have a provision for minors accounts that encourages early financial planning among investors.This serves a dual benefit of saving for children & rsquo; s education and marriage as well as teaching them the importance of investment discipline.
- Long-Term Wealth Creation: PPF scheme aligns perfectly with investors who have long-term financial goals, considering the lock-in period of a minimum of 15 years. It encourages savings discipline, thus building a substantial corpus over the tenure of investment.
Working of public provident fund (PPF)
A PPF interest rate calculator uses the formula mentioned below to calculate the amount of interest earned and the maturity amount of the investment:
F = P[(1 + i)n – 1)/i]
Where,
i is the prevailing rate of interest on PPF schemes
F is the maturity amount of your PPF investment
N is the tenure of investment (in years)
P is the principal amount invested (yearly)
Maturity period of public provident fund
The minimum maturity period of PPF accounts in India is 15 years. In the span of these 15 years, investors can contribute up to Rs. 1.5 lakhs per financial year. However, the maturity period can be extended in blocks of five years. Once the lock-in period of 15 years is over, investors can withdraw their funds along with the returns earned on their investments throughout the tenure of PPF investment. Additionally, investors may opt for a partial withdrawal from their investment in PPF in case of unforeseen circumstances. It is imperative to note that this facility can be availed only after 7 financial years have been completed.
Tax benefits of public provident fund
Investing in Public Provident Funds in India has significant tax benefits which makes it a lucrative investment avenue for individuals. Contributions to the PPF scheme are eligible for tax deductions under Section 80C of the Income Tax Act 1961. However, the maximum amount of deduction allowed as per the Act is subject to the specified limit, which is Rs. 1.5 lakhs per financial year. Unlike other financial instruments and investment avenues, the interest that PPF investors earn from this scheme is exempt from tax liability too.
Additionally, once the investment matures, the entire amount of maturity including the principal amount and the interest earned is exempt from tax. Thus, there is a triple tax benefit of making investments in a Public Provident Fund, that is, availing deductions on the contributions made, earning a tax-free interest, and tax exemptions available on maturity too.
Public provident fund (PPF) calculator
A Public Provident Fund is a financial tool that is specifically designed to compute the estimated returns on an individual’s Public Provident Fund (PPF). It serves as a valuable tool for investors to gain clarity on how their PPF investments can grow over time and build a corpus. Online PPF calculators facilitate instant calculations, thus encouraging them to make rational and well-informed decisions. For calculation purposes, only a few details are required, like the amount of deposits, prevailing rate of interest and the total tenure of investment.
Benefits of public provient fund calculator
- Decision-making: It allows investors to calculate the total amount of returns they can earn from their investments in a PPF scheme. This assists in informed investment decision-making so that individuals can align their financial goals accordingly.
- Free of cost: Investors can use the PPF return calculator for free. Moreover, one can use it as many times as required, without any usage limit or charges.
- User-friendly interface: Using a PPF account calculator requires very few basic details, such as the amount of total investment in a financial year, the tenure of investment, the frequency of contributions and the current rate of interest on PPF schemes. This makes the interface easy to use as there are no technical terms required, thus enabling all individuals to make use of it.
- Time-saving: By using a PPF calculator online, one can simplify the process of calculation of expected returns as it eliminates the need for extensive manual calculations required while estimating the returns.
Using the calculator
Now that we are aware of the benefits of a Public Provident Fund (PPF), here’s a step-by-step guide for you to make use of it:
Step 1: Access the PPF calculator
Open a PPF calculator on your mobile or laptop.
Step 2: Frequency of Investment
Once you have opened a PPF interest calculator online, the next step is to decide the frequency of your investments. It can be monthly, quarterly, semi-annually or annually, depending upon your capacity to make investment contributions in one year.
Step 3: Deposit Amount
The next step is to input the total amount of investment you are planning to make in a financial year. It is important to keep in consideration that the maximum amount of investment made in a year is Rs. 1.5 lakhs.
Step 4: Interest rate
Input the current rate of interest on the Public Provident Fund available.
Step 5: Tenure of investment
Input the total tenure of your PPF investment. The minimum tenure must be 15 years. If you want to increase it, you may extend the duration in blocks of five years.
Step 6: Calculate/Proceed
After entering all the required details, click on ‘Calculate/Proceed’.
Once you have followed the steps mentioned above, you can easily calculate the returns from your PPF investment scheme.
Investment stratgies
Tips for PPF optimisation
Optimising the investments made in the Public Provident Fund involves strategic planning. Here are some important tips for investors to maximise the returns on their PPF investments:
- Regular Contributions: It is important to make consistent contributions to your PPF account to benefit from the power of compounding over the long term.
- Extension for Long-Term Goals: You may consider extending your PPF investment in blocks of 5 years after the minimum lock-in period of 15 years to ensure that it is aligned with your long-term financial goals.
- Consider Opening Accounts for Minors: It will be beneficial to open PPF accounts for minors to provide for your children’s future needs including their education funding as well as marriage. Additionally, it also promotes saving discipline habits among children.
- Staying up to date: It is imperative to stay informed about any changes with respect to the rules of investments in PPF. Ensuring thorough knowledge regarding the benefits of a PPF account will help you take maximum advantage of the scheme.
By implementing these tips, investors can optimise their investments in PPF accounts.
Comparative between PPF and other saving schemes
- Nature: PPF is a long-term investment avenue with a minimum lock-in period of 15 years, whereas other savings schemes can have shorter tenures of investment.
- Returns: PPF offers fixed and tax-free returns which compound annually, whereas the case of other savings schemes might have varying returns that may be taxable
- Risk: PPF is considered to be a low-risk investment option as its backed by the government.However, the risks involved in other savings schemes can be comparatively higher.
- Purpose: PPF is ideal for investors with long-term financial goals like retirement planning and tax savings. On the contrary, other savings schemes are generally suitable for short to medium-term goals.
Conclusion
In conclusion, the Public Provident Fund (PPF) provides a secure investment avenue for people who aim for long-term savings and wealth accumulation. Its tax-exemption benefits and compounded returns make it a lucrative option for those seeking both stability and growth in their investment portfolio. As we move towards managing personal finance, the PPF scheme emerges as a savings tool that aligns with the investor’s financial goals and aspirations.
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FAQs
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