PPF calculator

How PPF interest is credited

PPF interest is declared by the Ministry of Finance for each quarter. The current rate is 7.1 per cent, held for October to December 2026, and it has stayed at that level since April 2020. The rate posted for a quarter applies to the balance in your account during that quarter only; the Government's next review can change it up or down, and the calculator takes a single rate as the assumption for the whole term.

Inside a month, the interest is computed on the lowest balance in the window from the 5th of the month to the end of the month, at one-twelfth of the annual rate. Twelve months' interest is then added once a year on 31 March. A deposit made on or before the 5th of a month earns interest for that month; a deposit made on the 6th or later does not, even if the rupee amount is the same.

The rule for depositing by 5 April

Because the lowest balance in each month matters, a single deposit put in on or before 5 April earns a full year of interest on that amount. A deposit made in March of the next financial year earns almost no interest in the year it was credited; only the following year's balance reflects it. On the ceiling amount of ₹1,50,000, this is not a small number. At the current 7.1 per cent, a once-a-year deposit by 5 April earns about ₹10,650 of interest in year one, while the same deposit spread monthly earns about ₹5,769. The calculator carries this directly in the secondary chart, so you can see the year-by-year gap at the rate you set.

The monthly spread is still a rule-respecting way to use PPF: it just gives up some interest to the timing. If a lump deposit before 5 April is not possible, treat the monthly spread as the baseline rather than skipping a year.

Worked example you can check

Take ₹1,50,000 a year, deposited on or before 5 April, at 7.1 per cent, for 15 years. In year one the opening balance is zero, the deposit lands at the start, so interest for the year is ₹1,50,000 times 0.071, or ₹10,650, and the closing balance is ₹1,60,650. Each year repeats the step: the next opening balance plus the fresh ₹1,50,000 both earn interest for 12 months.

The maturity on these inputs is about ₹40,68,209, of which ₹22,50,000 is your own deposits and ₹18,18,209 is interest. Minor variations in the last digit come from the sequence in which interest is rounded; the calculator prints the exact figure for every run.

Deposit amount and rate: how far each one moves the answer

Doubling the yearly deposit roughly doubles the maturity, because PPF has no proportion-based element in its formula. Doubling the rate, by contrast, does not double the maturity: the rate compounds on a balance that itself grew in earlier years, so late-term interest is far larger than early-term interest. The table below holds the term at 15 years and the deposit timing at 5 April.

The 1.1 percentage-point gap between 6.9 per cent and 8.0 per cent changes the 15-year maturity by about ₹4,00,105 on the maximum deposit. That gap is roughly one quarter's rate review in either direction, which is why the Government's quarterly circulars matter for anyone running PPF as a core holding.

Extensions in blocks of 5 years

At the end of 15 full financial years the account can be closed, kept open without fresh deposits, or extended in blocks of 5 years with fresh deposits. The extension with contributions option keeps the ₹500 minimum and the ₹1,50,000 maximum rules in place; the extension without contributions option keeps the account earning interest on the existing balance only. Either form of extension is applied for in writing within one year of maturity.

Across a 30-year horizon, a ₹1,50,000 yearly deposit by 5 April at 7.1 per cent grows to about ₹1.55 crore, against ₹40.68 lakh at 15 years. The second half of the balance is almost all interest: the same ₹1,50,000 a year is now earning on a much larger base.

Tax on PPF: the EEE status

Contributions are deducted at source nowhere; the subscriber claims the deduction. The deduction for the contribution is available only under the old regime, within the ₹1,50,000 aggregate that used to sit in section 80C of the 1961 Act and now sits under the corresponding provision of the Income-tax Act 2025. Under the new regime, the contribution still goes in, and the maturity and interest remain tax-free, but no deduction is available on the contribution itself.

The interest credited each year is exempt, and the maturity amount is exempt on withdrawal. PPF is therefore exempt at contribution, accumulation and withdrawal under the old regime; under the new regime only the accumulation and withdrawal legs are tax-free. The arithmetic on this page is before any tax deduction, so the maturity figure is comparable between the two regimes.

What this calculator leaves out

• A rate that changes from quarter to quarter. The Government reviews small savings rates each quarter; the calculator holds the single rate you enter steady for the full term.
• Loan against PPF, available from the third financial year, which reduces the balance earning interest while the loan is outstanding.
• Partial withdrawal after year 7, which trims the balance that compounds in later years.
• Opening balance other than zero. Running the calculator from the current year in a mid-course account will understate the maturity by the compounding on the existing balance.
• Any deduction limit outside PPF. To size the overall picture, the income tax calculator will compare the old and new regimes once it is live.

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