If you have ever typed a number into a PPF calculator and wondered why the maturity figure looks the way it does, this guide walks through the mechanics behind it. Public Provident Fund is one of the few savings instruments in India where the government sets the rate, guarantees the principal, and exempts the entire return from tax. That combination is rare, and it is why PPF still shows up in almost every long-term savings plan built around a post office or bank account. Below, we cover how the interest is calculated, what the 15-year lock-in actually means, how the tax exemption works, and when you can pull money out early. Worked examples use the current interest rate and the standard yearly deposit amounts of ₹50,000, ₹1,00,000, and ₹1,50,000.

What Is PPF and Why It's Popular for Long-Term Saving

A public provident fund calculator estimates how much a PPF account will be worth at maturity, based on the yearly deposit, the number of years, and the prevailing interest rate. PPF itself is a savings scheme run by the central government, available through post offices and most nationalised and private banks. An individual resident Indian can open one account in their own name, plus one on behalf of a minor child. Non-resident Indians are not permitted to open new PPF accounts, though NRIs who opened one while still resident can continue it until maturity on a non-repatriable basis.

The appeal comes down to three things. First, it is backed by the Government of India, so there is no market risk of the kind that comes with equity or debt mutual funds. Second, the interest rate, while variable, has stayed unusually stable: it has not moved from 7.1% per annum since April 2020. Third, the entire maturity amount, including the interest, is exempt from income tax, which is not true of bank fixed deposits or most other small savings schemes.

The minimum deposit is ₹500 in a financial year, and the maximum is ₹1.5 lakh. You can deposit in a lump sum or in up to twelve instalments a year. Deposits beyond ₹1.5 lakh in a year do not earn interest and are not eligible for the Section 80C deduction, so there is little point going over the ceiling. Because the account has a 15-year term and interest compounds annually, the numbers a PPF calculator produces can look counterintuitive at first: a modest yearly deposit of ₹1.5 lakh, kept up for the full term, grows to well over double the amount actually paid in. We show the exact working in the sections below, including a comparison table across different deposit amounts and tenures.

If you are weighing PPF against other tax-saving options such as NPS or Sukanya Samriddhi, our PPF vs NPS vs Sukanya guide covers how the three compare on lock-in, returns, and tax treatment.

How PPF Interest Is Compounded Annually

The PPF interest rate is set by the central government every quarter and applies uniformly, whether the account is held at a post office, State Bank of India, or any other authorised bank. There is no separate SBI rate or post office rate; the figure is national. For the July to September 2026 quarter, the rate stands at 7.1% per annum, unchanged for the sixth straight quarter and unchanged overall since April 1, 2020.

Interest is compounded annually, but it is worked out monthly in practice. The scheme calculates interest each month on the lowest balance in the account between the 5th and the last day of that month, then adds up the twelve monthly figures and credits the total to the account at the end of the financial year, on March 31. This is why the timing of a deposit matters: money deposited before the 5th of a month starts earning interest from that same month, while money deposited after the 5th only starts earning from the following month. Depositing the full yearly amount in the first week of April, rather than spreading it across the year or depositing late, maximises the interest earned.

A PPF calculator typically simplifies this by treating each year's deposit as a single lump sum made at the start of the year and compounding it annually at the notified rate. That is a reasonable approximation for a calculator, because it matches the outcome for anyone who deposits their full amount in early April, which is the pattern most calculators are built to illustrate. If you deposit at irregular points through the year, your actual maturity value will land slightly below the calculator's estimate, since some months will not have earned interest on the full balance.

Using the current 7.1% rate, a yearly deposit of ₹1,50,000 made at the start of each year, compounded annually, is worth roughly ₹40.68 lakh after 15 years against total deposits of ₹22.5 lakh. That means about ₹18.18 lakh of the maturity value is interest. The section below shows this working alongside other deposit amounts and tenures.

The 15-Year Lock-In and Extension Rules

The PPF maturity period is 15 years from the end of the financial year in which the account was opened, not 15 years from the date of deposit. So an account opened in June 2026 completes its 15-year term on March 31, 2042, not in June 2041. This detail trips up a lot of first-time PPF calculator users, who sometimes expect maturity to fall exactly 15 years after their account-opening date.

At maturity, an account holder has three choices. The first is to withdraw the full balance and close the account, which is the simplest route and comes with no tax on the withdrawal. The second is to extend the account in a block of five years with fresh contributions, by submitting Form H at the post office or bank within one year of maturity. Deposits made without submitting this form on time are treated as irregular: they do not earn interest and do not qualify for the Section 80C deduction. The third choice is to extend without further contributions, letting the existing balance continue earning interest while making no new deposits.

There is no cap on how many five-year extension blocks an account holder can take, so an account can, in principle, keep running well past retirement. During an extension with contributions, one withdrawal is permitted each financial year, capped at 60% of the balance that stood at the start of that five-year block. During an extension without contributions, the account holder can withdraw any amount, once a year, with the remaining balance continuing to compound.

For someone using a PPF calculator to plan retirement income, this extension mechanism is often more useful than the headline 15-year figure. Running the numbers at 7.1% for 20 and 25 years shows the effect of compounding over a longer horizon: a ₹1.5 lakh yearly deposit reaches roughly ₹66.58 lakh at 20 years and roughly ₹1.03 crore at 25 years, against total deposits of ₹30 lakh and ₹37.5 lakh respectively. The full comparison, including the 50,000 and ₹1,00,000 deposit levels, is in the table further down.

PPF's EEE Tax Status Explained

A ppf calculator post office visitor is usually looking for one thing above all: how much of the maturity amount they actually get to keep. PPF is one of the few instruments in India with full EEE, or exempt-exempt-exempt, treatment, and that is central to why the scheme remains attractive even at a modest 7.1% headline rate.

The first exemption applies to what goes in. Contributions to a PPF account qualify for a deduction under Section 80C of the Income Tax Act, 1961, up to a combined limit of ₹1.5 lakh across all Section 80C investments in a financial year, not ₹1.5 lakh for PPF alone. If someone is already claiming the full ₹1.5 lakh through EPF, life insurance premiums, or an ELSS fund, additional PPF deposits will not bring a further 80C deduction, even though those deposits still earn interest tax-free.

The second exemption applies to what the money earns. Interest credited to a PPF account each year is not added to taxable income, unlike interest from a bank fixed deposit or a recurring deposit, both of which are taxed at the depositor's slab rate.

The third exemption applies to what comes out. The full maturity amount, principal plus accumulated interest, is exempt from tax when withdrawn, whether that withdrawal happens at the 15-year mark or during a later extension period. This EEE treatment is one of the clearest differentiators between PPF and comparable options like the National Savings Certificate, where the interest is taxable, or a bank fixed deposit, where both the deposit and the return sit inside the general tax net (barring the specific 80C-eligible five-year tax-saving FD, which still taxes the interest).

Because none of this depends on income slab, the actual benefit of the exemption is larger for someone in the 30% tax bracket than for someone in the 5% bracket, even though both see the same 7.1% headline rate.

Partial Withdrawal and Loan Against PPF

For money needed before the 15-year lock-in ends, a post office public provident fund calculator user has two routes: a partial withdrawal or a loan against the balance, and the two are not available at the same time.

A loan is available between the 3rd and 6th financial year of the account, up to 25% of the balance at the end of the second year immediately preceding the year of the loan application. It must be repaid within 36 months, along with interest at a rate set by the government (typically 1% to 2% above the prevailing PPF rate, depending on repayment timing). Because the loan amount stays inside the account and keeps compounding while it is out, this route tends to be the more efficient of the two for a short-term need in the early years.

A partial withdrawal becomes available from the 7th financial year onward, once five complete financial years have passed since the account was opened. The amount is capped at the lower of 50% of the balance at the end of the fourth year preceding the withdrawal, or 50% of the balance at the end of the immediately preceding year. Only one withdrawal is permitted per financial year, and it requires Form C along with the passbook. Every rupee withdrawn this way is tax-free, in line with the scheme's EEE status.

Worked Example: Maturity Value at 7.1%

The table below shows maturity value at the current 7.1% annual rate, assuming the full yearly deposit is made at the start of each financial year and compounds annually, which is the standard assumption most PPF calculators use.

For example, a ₹1,50,000 deposit made at the start of each year for 15 years, compounded annually at 7.1%, grows using the annuity-due formula: maturity = deposit × [((1 + rate)^years − 1) ÷ rate] × (1 + rate). Plugging in the numbers gives a compounding factor of roughly 27.12, so ₹1,50,000 × 27.12 works out to approximately ₹40.68 lakh, of which ₹18.18 lakh is interest and the rest is the ₹22.5 lakh actually deposited.

FAQs

What is the current PPF interest rate and how often is it revised?

The PPF interest rate for the July to September 2026 quarter is 7.1% per annum, compounded annually. The Ministry of Finance reviews and notifies rates for PPF and other small savings schemes every quarter, so the figure can change every three months, though it has stayed at 7.1% since April 2020. Always check the latest notification before relying on this figure for planning.

Can I extend my PPF account after 15 years?

Yes. Within one year of maturity, an account holder can extend the account in blocks of five years, either with fresh contributions (by submitting Form H) or without further contributions. There is no limit on the number of five-year extensions. Extending with contributions allows one withdrawal per year, capped at 60% of the balance at the start of that block.

Is PPF interest completely tax-free?

Yes, PPF has EEE status. The interest credited each year is exempt from income tax, and the entire maturity amount, including accumulated interest, is tax-free on withdrawal. This applies whether the withdrawal happens at the original 15-year maturity or during a later extension period, and it holds regardless of the account holder's income tax slab.

How much can I invest in PPF in a financial year?

The minimum deposit is ₹500 and the maximum is ₹1.5 lakh per financial year, made in a lump sum or up to twelve instalments. The ₹1.5 lakh figure is also the overall Section 80C ceiling, shared with other 80C investments, so PPF deposits beyond what is needed to fill that ceiling still earn tax-free interest but bring no additional 80C deduction.

Related Calculations

For the full year-wise maturity table at the current rate, see our PPF year-wise chart. If you're deciding whether to open your account at a bank or the post office, our post office PPF calculator guide covers the account-opening and transfer process in detail (the rate itself is identical either way).

Is This Right For You?

PPF calculators give a solid estimate for a straightforward case: one account, deposits made near the start of each financial year, no early withdrawals. If your situation involves a disputed balance, an account inherited after the holder's death, deposits split across multiple accounts (which is not permitted for one individual), or you are weighing PPF against employer-linked retirement benefits, treat the calculator as a starting point and confirm the specifics with your bank, post office, or a qualified financial advisor before acting on the numbers.

Conclusion

A PPF calculator is only as useful as the assumptions behind it. Once you know that interest compounds annually but is worked out on the lowest monthly balance, that the 15-year term runs from the end of the account-opening financial year rather than the opening date itself, and that the entire maturity amount is exempt from tax, the numbers stop looking like a black box and start looking like straightforward arithmetic on a fixed, government-set rate.

Try the PPF calculator with your own deposit amount and tenure to see the maturity value and interest breakdown for your specific plan.