The calculator below uses the Public Provident Fund Scheme, 2019 rules: annual contribution capped at ₹1.5 lakh per FY, 15-year minimum tenure, compounded annually, and fully tax-free at withdrawal under the EEE (Exempt-Exempt-Exempt) status. The current rate is 7.1% p.a. (Q4 FY 2025-26 notification, unchanged since Q2 FY 2020-21).
PPF is one of the few investments where the entire chain — contribution, interest, and maturity — is tax-free. For someone in the 30% slab, that effectively makes 7.1% PPF equivalent to a roughly 10.3% pre-tax FD return.
How PPF maturity is calculated
PPF accepts annual contributions (you can split into up to 12 instalments per year), and interest is compounded annually at the rate notified by the Ministry of Finance every quarter.
For a deposit P made at the start of each year for n years at rate r:
M = P × [(1 + r)ⁿ − 1] / r × (1 + r)
The (1 + r) factor at the end is because the first deposit earns a full year’s interest. Interest is actually credited on the lowest balance between the 5th and the last day of each month — so to maximise interest, you should deposit before the 5th of April each year. Late deposits in the middle of the month cost a small amount of interest each year.
The calculator above assumes you deposit at the start of each year (the optimal pattern). If you deposit monthly or in lumps mid-year, actual maturity will be 1–2% lower.
PPF rate history (last 10 years)
The rate is announced quarterly by the Ministry of Finance and is anchored to the 10-year G-sec yield with a +25bps spread:
| Period | Rate |
|---|---|
| Apr 2016 – Sep 2016 | 8.10% |
| Oct 2016 – Mar 2017 | 8.00% |
| Apr 2017 – Jun 2017 | 7.90% |
| Jul 2017 – Dec 2017 | 7.80% |
| Jan 2018 – Sep 2018 | 7.60% |
| Oct 2018 – Jun 2019 | 8.00% |
| Jul 2019 – Mar 2020 | 7.90% |
| Apr 2020 – Mar 2020 | 7.10% |
| Apr 2020 – present (FY 2025-26) | 7.10% |
The rate has been constant at 7.1% for over 5 years now, despite repo rate moves. The PPF rate is sticky for political reasons — every quarter when 10-year G-sec drops, the small savings rate review recommends a cut, and the government usually defers it.
Worked example: ₹1.5 lakh/year for 15 years at 7.1%
The standard maxed-out PPF account.
- Annual contribution P = ₹1,50,000
- r = 0.071
- n = 15
| Metric | Value |
|---|---|
| Total invested over 15 years | ₹22,50,000 |
| Maturity value | ₹40,68,209 |
| Interest earned (tax-free) | ₹18,18,209 |
| Wealth gain ratio | 1.81× |
For a 30% slab taxpayer, the effective post-tax equivalent is roughly ₹40.68L from a tax-free instrument — to match this in a taxable FD, you’d need ~10.3% pre-tax over 15 years, which no Indian bank offers in 2026.
Should you extend PPF beyond 15 years?
After the 15-year lock-in ends, you have three options:
- Withdraw the full balance and close the account
- Keep the balance, stop contributing (interest still accrues; partial withdrawal allowed once a year)
- Extend in 5-year blocks with continued contributions (must submit Form H within 1 year of maturity)
Compounding pattern after extending — same ₹1.5L/year contribution at 7.1%:
| Total tenure | Maturity value |
|---|---|
| 15 years (default) | ₹40,68,209 |
| 20 years (one extension) | ₹66,58,288 |
| 25 years (two extensions) | ₹1,03,08,015 |
| 30 years (three extensions) | ₹1,54,50,910 |
A 30-year PPF crosses ₹1.5 crore tax-free with ₹45 lakh of contributions — the kind of corpus people pay much higher fees to chase in equity. The catch: PPF only earns 7.1%, while equity is expected to return 11–13% over 30 years. The right comparison is post-tax: at the 30% slab, the certainty-equivalent return on PPF is comparable to a 9–10% taxable instrument.
Where PPF fits in a portfolio
PPF is best treated as the debt portion of a long-term portfolio, not the entire allocation. Its three structural advantages over FDs and bonds:
- EEE tax status: contribution deduction u/s 80C, interest tax-free, maturity tax-free
- Sovereign guarantee: zero credit risk, unlike corporate FDs or NCDs
- Floor on rate: the political stickiness of small-savings rates means PPF rarely drops below 7%, even when bank FDs go to 5%
The drawback: it’s slow. ₹1.5L/year cap means it can’t absorb significant capital. For someone with 5–10 lakh annual investment capacity, PPF takes a max of ₹1.5L; the other ₹3.5–8.5L needs to find a home elsewhere (equity SIPs, NPS, EPF, ELSS, etc.). PPF is the foundation; not the whole house.
Frequently asked questions
Can I open more than one PPF account?
Only one PPF account per individual is allowed under the PPF Scheme. The second account is automatically deactivated by the bank, and any deposits in it earn no interest. You can open one for yourself and one each for minor children (you’ll be the guardian), but the ₹1.5L cap is combined across all the accounts in your name including those opened for minors.
Can I withdraw before 15 years?
Limited withdrawals only. From year 7 onward, you can withdraw once per year, up to 50% of the balance at the end of the 4th preceding year or end of the previous year, whichever is lower. Premature closure is allowed only after 5 years and only for serious illness, higher education, or NRI status change — and it carries a 1% penalty on the interest paid for the entire holding period.
Can NRIs open a PPF account?
No — NRIs cannot open new PPF accounts. If you opened one as a resident and later became NRI, you can continue contributions until the account matures, but cannot extend further. After maturity, the balance must be withdrawn. Some banks may operationally allow continuing post-NRI status, but the rule per the 2019 Scheme is no further contributions.
Is PPF interest credited monthly or yearly?
Calculated monthly (on the lowest balance between 5th and last day of the month), but credited only at year-end, on 31st March. So a deposit made on 4th April earns interest for the full FY; a deposit made on 6th April earns interest only from the next month. This makes the deposit-by-5th-April rule meaningful — across 15 years, depositing late costs about ₹50,000–₹70,000 in lost interest at the ₹1.5L cap.
How does PPF compare to ELSS in 2026?
| Feature | PPF | ELSS (mutual fund) |
|---|---|---|
| Lock-in | 15 years | 3 years per instalment |
| Returns | 7.1% (notified) | 12–14% (expected, market-linked) |
| Risk | Sovereign-guaranteed | Equity market risk |
| Tax on returns | Tax-free | LTCG 12.5% above ₹1.25L/yr |
| Annual cap | ₹1.5L | No cap (₹1.5L for 80C deduction) |
| Liquidity post-lock | Annual withdrawal allowed | Fully liquid after 3 years |
Most personal-finance advisors recommend splitting 80C between PPF (debt anchor) and ELSS (equity growth) for someone in their 30s. As you approach retirement, weight more toward PPF.
What’s the difference between PPF and EPF?
EPF (Employees’ Provident Fund) is mandatory for salaried employees with monthly contribution from both employee and employer (8.33% goes to EPS pension). EPF rate for FY 2024-25 is 8.25%. PPF is voluntary, available to everyone (including self-employed), capped at ₹1.5L/year, current rate 7.1%. Most salaried Indians have both — EPF as a default through payroll, PPF as a separate self-managed account.
Can I take a loan against PPF?
Yes, between years 3 and 6. You can borrow up to 25% of the balance at the end of the 2nd year preceding the year of application. Loan interest is 1% above the PPF rate (so ~8.1% currently), and the loan must be repaid within 36 months. After year 6, no more loans — only partial withdrawals.
Is the calculator accurate if the rate changes?
The calculator above uses a constant rate. In reality the PPF rate is reset every quarter, so over a 15-year tenure you’ll see anywhere from 8 to 60 different rate periods. The actual maturity will differ slightly from the calculator’s projection — typically by 2–4% over a 15-year window depending on the rate trajectory. For long-term planning the calculator’s projection is close enough; for exact compliance use your PPF passbook or the SBI/India Post PPF portal.
Sources
- Ministry of Finance: Public Provident Fund Scheme, 2019 (Government Notification)
- National Savings Institute: Quarterly small-savings interest rate notifications
- Income Tax Act 1961: Section 80C, Section 10(11) (PPF maturity exemption)
- SBI and India Post PPF rules and operational guidelines