PPF Calculator

Public Provident Fund — The Last True EEE Investment

PPF (Public Provident Fund) enjoys EEE (Exempt-Exempt-Exempt) tax status — contributions up to ₹1.5 lakh are deductible under 80C, interest earned is exempt from income tax, and the maturity amount is completely tax-free. No other investment in India currently combines all three exemptions for individuals. ELSS has LTCG tax at redemption. NPS has taxable annuity. EPF has conditions. PPF is clean.

The government sets the PPF interest rate quarterly. As of Q1 FY 2025-26, the rate is 7.1% per annum. Historically the rate has ranged from 12% in the 1980s to a low of 7.1% in recent years. The rate applies to the minimum balance in the account between the 5th and last day of each month — so always deposit before the 5th to get credit for that month.

PPF accounts can be opened at any post office or designated public sector bank branches. The minimum annual deposit is ₹500 and the maximum is ₹1.5 lakh per financial year. Deposits below ₹500 in a year make the account 'inactive' and it loses interest for that year.

Partial Withdrawal and Loan Rules

PPF's 15-year lock-in has exceptions. From year 7 onwards (the 7th financial year after the account opening year), you can make one partial withdrawal per year. The maximum withdrawal is 50% of the balance at the end of the 4th year preceding the withdrawal year, or 50% of the balance at the end of the immediately preceding year, whichever is lower.

PPF loans are available from year 3 to year 6. You can borrow up to 25% of the balance at the end of the 2nd year preceding the loan year. The loan carries a modest interest rate of 1% above the prevailing PPF rate and must be repaid within 36 months.

Extending PPF Beyond 15 Years

At maturity (15 years), you have three choices. One: close the account and take the full corpus. Two: extend in 5-year blocks without further contributions — the balance continues to earn interest and you can make one withdrawal per year. Three: extend in 5-year blocks with continued contributions — you maintain the ₹1.5 lakh annual investment limit and get continued 80C benefits.

Most financial planners recommend extending with contributions if you don't need the money immediately. The EEE benefit continues indefinitely as long as the account is active. A PPF account extended to age 50 or 55 and closed just before retirement can be a substantial tax-free lump sum component of retirement corpus.

Account transfer: PPF accounts can be transferred between post offices and between post office and bank — useful if you move cities. The original account opening date is preserved, so the 15-year tenure is not reset.

PPF Corpus at 7.1% — What 15 Years Builds

At maximum contribution of ₹1.5 lakh per year (₹12,500/month), at 7.1% interest, the PPF corpus at maturity (15 years) is approximately ₹40.7 lakh. Total contribution over 15 years: ₹22.5 lakh. Interest earned: ₹18.2 lakh — tax-free.

If extended for two more 5-year blocks (total 25 years) with continued contributions: corpus exceeds ₹1 crore. The power of compounding at 7.1% over 25 years in a completely tax-free vehicle is why PPF remains relevant despite the rate being lower than equity returns.