The deposit is made at the start of each year and interest is credited annually on the running balance. Real PPF interest is computed on the lowest balance between the 5th and the last day of each month, so a deposit made in April earns slightly more than the same deposit made in March.
Maturity value
₹40,68,209
- You deposited
- ₹22,50,000
- Interest earned
- ₹18,18,209
Year by year
Why PPF is unusual
PPF is one of the few Indian instruments that is exempt at all three stages: the contribution is deductible under section 80C, the interest accrues tax-free, and the maturity amount is tax-free. That combination is worth considerably more than the headline rate suggests — for someone in the 30% bracket, a tax-free 7.1% is comparable to a taxable deposit paying well over 10%.
The price is liquidity. The account runs for 15 financial years, partial withdrawals are only allowed from the seventh year and are capped, and the contribution ceiling is ₹1.5 lakh a year.
The deposit date trick
Interest is calculated on the lowest balance in the account between the 5th and the last day of each month. Depositing before the 5th of April therefore earns a full year of interest on that contribution; depositing on the 6th of March earns almost none. Over a 15-year account, consistently depositing in early April rather than late March is worth a meaningful sum for no extra money.
The calculator assumes the favourable case — a contribution at the start of the year — so treat the result as the best-case figure for the rate you entered.
Extending past 15 years
At maturity the account can be extended in blocks of five years, with or without further contributions. Extending with contributions is how the balances that get quoted in the tens of lakhs are built; the tenure slider here goes to 50 years so you can see what that looks like.
Common questions
The rate is set by the Ministry of Finance and reviewed quarterly, so it changes. Enter the rate currently in force — the National Savings Institute link below publishes it. The default here is the rate that has applied for several recent quarters.
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