PPF Calculator

How the balance is actually built

PPF compounds once a year, and the arithmetic is short enough to check by hand. At the end of each financial year the account is credited with interest on the whole balance, deposit included:

Closing balance = (opening balance + deposit) × (1 + r)

Take the maximum deposit of ₹1,50,000 a year at the current 7.1%. In year one there is no opening balance, so the interest is 7.1% of ₹1,50,000 — ₹10,650 — and the account closes at ₹1,60,650. In year two the interest is charged on that ₹1,60,650 plus the new deposit, and so on. After the full 15-year term you have put in ₹22.5 lakh and the balance is about ₹40.68 lakh, of which ₹18.18 lakh is interest.

The shape of that growth is worth expanding in the schedule above. Interest in the first year is ₹10,650. Interest in the fifteenth year alone is close to ₹2.7 lakh — nearly twice the deposit that goes in that year. PPF looks unremarkable for about eight years and then does most of its work in the last third of the term, which is precisely why the accounts people abandon in year four never show them what the scheme can do.

The 5th of the month, and the ₹2.7 lakh it can cost you

This is the part a generic compound-interest calculator gets wrong, and the one thing on this page worth acting on. Interest for a month is calculated on the lowest balance in the account between the 5th day and the last day of that month. A deposit made on the 5th counts. A deposit made on the 6th does not — for that month, the lowest balance is the balance before your money arrived.

Scale that up. Deposit ₹1,50,000 on 5 April and it earns interest for all twelve months of the financial year. Deposit the same ₹1,50,000 on 30 March, still inside the same financial year and still using up that year's limit, and it earns interest for none of them. Do that every year for fifteen years and you finish with about ₹37.99 lakh instead of ₹40.68 lakh. The deposits are identical; the dates cost roughly ₹2.7 lakh.

Even being a day late is not free. Missing the 5th of April costs one month's interest on ₹1,50,000, ₹888, and that ₹888 would itself have compounded for the rest of the term. Repeat the slip every year and it comes to a little over ₹22,000 by maturity. Set a standing instruction for the first working day of April and the problem disappears permanently.

One ceiling, not one per account

The ₹1,50,000 annual maximum applies to the subscriber, not to the passbook. Your own account and any account you operate for a minor share a single limit between them, so a parent who puts ₹1,50,000 into their own account has nothing left to put into a child's. Two working adults can each contribute the full amount, which is the only legitimate way a household gets to ₹3 lakh a year. Money paid in above the aggregate ceiling earns no interest at all and is returned to you, so the mistake is quiet rather than costly — but it is a year of lost compounding on the excess.

The floor matters too. Less than ₹500 into the account in a financial year and it is treated as discontinued, which suspends the loan and withdrawal facilities until it is revived.

Year 15, and the extension most people miss

At the end of the term you can take the whole balance, tax free, and close the account. You can also extend it in blocks of 5 years, and there are two different extensions that people routinely confuse. Extending with contributions lets you keep depositing and keeps the full ceiling available; it has to be opted into within a window after maturity. Extending without contributions happens by default if you simply leave the money alone — the balance keeps earning the notified rate and you can withdraw from it, but you cannot resume deposits later.

Run the calculator at 20 years to see why this matters. The same ₹1,50,000 a year reaches about ₹66.58 lakh, and by then the interest earned has overtaken everything you deposited. The last five years of a PPF account are the most productive five years it will ever have, because the rate is applied to the largest balance it has ever held.

Getting at the money before the term ends

A PPF account is not as locked as its reputation suggests, though the access is deliberately awkward. From year 3 to year 6 you can take a loan against the balance, repayable with interest to your own account. From year 7 onwards partial withdrawals are allowed instead. Premature closure is possible only in narrow circumstances — serious illness, higher education, a change of residence status — and carries an interest penalty.

Every rupee taken out is a rupee that stops compounding for the rest of the term, and the schedule above shows how expensive that is in later years. Treat the loan and withdrawal facilities as an emergency route, not a feature.

The tax case, and where it has weakened

PPF carries EEE treatment: the deposit is deductible, the interest is exempt, and the maturity amount is exempt. Two of those three still apply to everybody. The first does not.

The deduction for the deposit exists only under the old regime, and the new regime is now the default under the Income-tax Act, 2025. If you have not opted out of it, the money you put into PPF buys you no deduction whatsoever, and the scheme has to justify itself purely on the return. That case is still reasonable — 7.1% tax free is worth roughly 10.3% before tax to someone taxed at 30% plus 4% cess, so that is the number a taxable deposit has to beat — but it is a narrower case than the one PPF was sold on for thirty years. This page does not track deposit rates, so check what your own bank is quoting today before concluding either way. If you are below the tax threshold anyway, the exemption is worth nothing to you and you are simply buying a 7.1% return with a fifteen-year lock-in.

What this calculator cannot tell you

It cannot tell you what the rate will be. Small savings rates are notified every quarter by the Ministry of Finance; the 7.1% shown here applies to Q2 FY 2026-27 and has been unchanged since April 2024 — the position as at 18 August 2026 — but a fifteen-year projection at a rate that is reviewed four times a year is an illustration rather than a promise. Rerun it a point lower to see how much of the maturity figure is riding on that assumption.

It also assumes perfect discipline — the same deposit every year, always in early April, never touched. Real accounts have skipped years and withdrawn school fees. And it says nothing about whether PPF is the right place for the money: a fifteen-year horizon is long enough that equity has historically done better, and PPF's job in most portfolios is to be the part that cannot fall, not the part that grows fastest.