Complete guide
Reviewed July 2026The Public Provident Fund is India's most powerful safe investment — not because of its rate, but because of its tax treatment. PPF is EEE: contributions deductible under 80C (old regime), interest completely tax-free, and maturity completely tax-free. A 7.1% tax-free return equals roughly 10.1% pre-tax for someone in the 30% bracket — with a sovereign guarantee.
This calculator projects your PPF corpus for any yearly contribution and rate, over the 15-year term or extended horizons, showing total invested, interest earned and maturity value.
The details reward attention: interest is credited on a specific monthly calculation rule, the 15-year clock counts financial years, and the 5-year extension blocks can compound your corpus far past the headline term. All covered below.
How PPF interest and maturity work
Yearly compounding on annual contributions (annuity-due): M = C × [ ((1+r)^n − 1) ÷ r ] × (1+r) C = yearly contribution (₹500 min – ₹1.5 lakh max) r = PPF rate (7.1% currently; set quarterly by the government) n = years (15-year base term)
Monthly rule that matters: interest each month accrues on the lowest balance between the 5th and the month-end, credited once at year-end. Deposit before the 5th — ideally the full ₹1.5 lakh in the first week of April — and the whole year's contribution earns the whole year's interest.
Worked example: ₹1.5 lakh every year
- C = ₹1,50,000 deposited each April; r = 7.1%; n = 15 years.
- Annuity factor: ((1.071^15 − 1) ÷ 0.071) × 1.071 = 26.89.
- Maturity ≈ 1,50,000 × 26.89 ≈ ₹40.68 lakh.
- Total invested: ₹22.5 lakh → tax-free interest ≈ ₹18.18 lakh.
- Same discipline continued through two 5-year extensions (25 years total): corpus ≈ ₹1.03 crore — entirely tax-free.
| Yearly deposit | 15 years | 20 years | 25 years |
|---|---|---|---|
| ₹50,000 | ₹13.56 L | ₹22.3 L | ₹34.4 L |
| ₹1,00,000 | ₹27.12 L | ₹44.5 L | ₹68.7 L |
| ₹1,50,000 | ₹40.68 L | ₹66.8 L | ₹1.03 Cr |
Rules that shape your outcome
The 15-year clock and extensions
Maturity falls 15 complete financial years after the year of opening — an account opened in January 2026 matures 1 April 2041. After maturity you may extend in 5-year blocks indefinitely: with contributions (submit Form H within a year) or without (the default — the corpus keeps compounding tax-free and allows one withdrawal per year). Retirees often treat an extended PPF as a tax-free quasi-pension.
Liquidity before maturity
- Loans: years 3–6, up to 25% of the balance two years prior, at just 1% above the PPF rate.
- Partial withdrawals: from year 7, up to 50% of the 4th-preceding-year balance, once per year.
- Premature closure: after 5 years, only for specified grounds (serious illness, higher education, NRI status change) at a 1% rate penalty across the account's life.
Contribution rules
- ₹500 minimum per year keeps the account active; missing it costs a ₹50/year default fee to regularize.
- ₹1.5 lakh annual cap across your own and minor-child accounts combined; excess deposits earn nothing and are refunded.
- One account per person (plus guardian accounts for minors); joint accounts aren't permitted.
- NRIs can't open new accounts but may continue existing ones to maturity (no extensions).
PPF vs the alternatives — and how to use this calculator
In the 30% bracket, nothing safe beats PPF post-tax. Its constraints are the cap (₹1.5 lakh/year) and the horizon (15 years). The standard playbook: max PPF first for the safe portion of a long-term portfolio, then FDs/debt funds for medium-term money, equity SIPs for growth.
| PPF | 5-yr Tax-saver FD | Debt fund (3yr+) | |
|---|---|---|---|
| Current return | 7.1% tax-free | ~7.25% taxable | market-linked (~7%) |
| Post-tax (30% slab) | 7.1% | ~5.0% | taxed at slab on redemption |
| Lock-in | 15 yrs (partial access from yr 7) | 5 yrs hard | none |
| Guarantee | Sovereign | DICGC to ₹5 L | none |
| 80C benefit | Yes | Yes | No |
- Enter your planned yearly contribution and the current rate (7.1%).
- Set 15 years for the base term — then try 20 and 25 to price the extension option.
- Deposit before April 5th each year to capture the full year's interest.
- Re-run annually as the quarterly rate changes; treat the output as a living estimate.
Frequently asked questions
Glossary
- PPF
- Public Provident Fund — a 15-year sovereign-backed savings scheme with EEE tax status.
- EEE
- Exempt-Exempt-Exempt: contribution, interest and maturity all tax-free.
- 80C
- The old-regime deduction section covering PPF contributions up to ₹1.5 lakh.
- Form H
- The form electing a 5-year extension with continued contributions.
- 5th-of-month rule
- Interest accrues on the lowest balance between the 5th and month-end — deposit early.
- Extension block
- Post-maturity 5-year continuation, with or without fresh contributions.
- Sovereign guarantee
- Backing by the central government itself, not deposit insurance.
- Inactive account
- A PPF that missed the ₹500 yearly minimum; revivable with arrears plus fees.
Key takeaways
PPF converts ₹1.5 lakh a year into ~₹41 lakh over 15 years — and ~₹1 crore over 25 — entirely tax-free with a sovereign guarantee. Maximize it with three habits: deposit the full amount in early April, never miss the ₹500 minimum, and treat the 5-year extensions as the scheme's hidden second act. In any tax bracket above 20%, fill PPF before any other guaranteed instrument.
Project your corpus above at 15, 20 and 25 years — the extension math is usually the most persuasive retirement chart you'll see this year.