What is the Public Provident Fund?
The Public Provident Fund is one of India’s most popular long-term savings options. Backed by the government, it pairs a guaranteed rate of return with generous tax treatment: your deposits qualify for a deduction, the interest accrues tax-free, and the final maturity amount is exempt too. That combination — safety plus a tax-free return — is why so many people use it as the bedrock of their retirement or goal-based savings.
The trade-off is liquidity. A PPF locks your money away for fifteen years, with only limited partial withdrawals allowed from the seventh year. It rewards patience rather than quick access.
How PPF interest builds up
Each year you deposit up to ₹1,50,000, and interest is compounded once at the end of the financial year. Because every year’s interest is added back to the balance, the next year’s interest is worked out on a larger sum — the familiar compounding effect. Deposit early in the year, ideally before the 5th of April, and your contribution earns interest for all twelve months rather than missing a slice of it.
The maturity value follows the future value of an annuity: M = D × (((1 + i)n − 1) / i) × (1 + i), where D is the yearly deposit, i the annual rate as a decimal, and n the number of years — the extra (1 + i) reflecting deposits that earn from the start of each year.
Example: ₹1,50,000 a year for 15 years at 7.1%
The table below is produced by the same engine that powers the calculator above, using the maximum yearly deposit and start-of-year timing. Watch the interest column climb each year even though the rate never changes — that is compounding rewarding the years you stay invested.
| Year | Deposit | Interest | Balance |
|---|---|---|---|
| 1 | ₹1,50,000.00 | ₹10,650.00 | ₹1,60,650.00 |
| 2 | ₹1,50,000.00 | ₹22,056.15 | ₹3,32,706.15 |
| 3 | ₹1,50,000.00 | ₹34,272.14 | ₹5,16,978.29 |
| 4 | ₹1,50,000.00 | ₹47,355.46 | ₹7,14,333.75 |
| 5 | ₹1,50,000.00 | ₹61,367.70 | ₹9,25,701.44 |
| 6 | ₹1,50,000.00 | ₹76,374.80 | ₹11,52,076.24 |
| 7 | ₹1,50,000.00 | ₹92,447.41 | ₹13,94,523.66 |
| 8 | ₹1,50,000.00 | ₹1,09,661.18 | ₹16,54,184.84 |
| 9 | ₹1,50,000.00 | ₹1,28,097.12 | ₹19,32,281.96 |
| 10 | ₹1,50,000.00 | ₹1,47,842.02 | ₹22,30,123.98 |
| 11 | ₹1,50,000.00 | ₹1,68,988.80 | ₹25,49,112.78 |
| 12 | ₹1,50,000.00 | ₹1,91,637.01 | ₹28,90,749.79 |
| 13 | ₹1,50,000.00 | ₹2,15,893.23 | ₹32,56,643.02 |
| 14 | ₹1,50,000.00 | ₹2,41,871.65 | ₹36,48,514.68 |
| 15 | ₹1,50,000.00 | ₹2,69,694.54 | ₹40,68,209.22 |
Extending your PPF beyond 15 years
When the initial term ends you are not forced to close the account. You can extend it in five-year blocks, either leaving the corpus to keep compounding or continuing to contribute. To model an extension, set your current balance to your existing corpus and choose a shorter tenure — the calculator will project the growth from there.
A note on accuracy
The PPF interest rate is reviewed by the Government of India every quarter, so it can rise or fall over a fifteen-year term. This tool assumes the single rate you enter stays constant throughout. Treat the result as an illustration of how the scheme compounds — not as a guaranteed outcome or as financial advice.
Frequently asked questions
What is a PPF account?+
The Public Provident Fund (PPF) is a long-term, government-backed savings scheme in India. It runs for 15 years, offers a fixed rate of interest set each quarter by the government, and both the interest earned and the maturity amount are tax-free under the current rules.
How much can I deposit in a PPF each year?+
You can deposit between ₹500 and ₹1,50,000 in a single financial year, in one go or across several instalments. Deposits above the ₹1.5 lakh ceiling do not earn interest, which is why this calculator caps the yearly deposit at that limit.
How is PPF interest calculated?+
Interest is compounded once a year and credited at the end of each financial year. Officially it is worked out on the lowest balance between the 5th and the last day of every month, so depositing before the 5th of April helps your contribution earn interest for the whole year. This calculator models that full-year crediting with its start-of-year deposit timing.
What happens after 15 years?+
On maturity you can withdraw the entire balance tax-free, keep the account without further deposits and continue earning interest, or extend it in blocks of five years with or without fresh contributions. Enter your current balance here to project an extension from your existing corpus.