PPF Calculator

What is a PPF Calculator?

The initial step toward wealth generation is accumulating savings. The options for savings accounts are numerous. however, look for those that promise substantial returns without risk. PPF accounts are one of the most common features which come into the picture. PPF account refers to a Public Provident fund account and is meant to invest your valuable capital.

If you are a new employee or who wishes to save for the future, then PPF is ideal for you. Calculating the interest rates and returns on your PPF account turns a bit difficult. To make these difficult calculations easy, PPF account calculator can be used.

What is PPF?

Public Provident Fund ( PPF ), was introduced in India in 1968 with the objective to mobilize small savings in the form of investment, coupled with a return on it. It still remains a favorite savings avenue for many investors as the returns are tax-free. It can also be called a savings-cum-tax savings investment vehicle that enables one to build a retirement corpus while saving on annual taxes. Therefore, anyone looking for a safe investment option to save taxes and earn guaranteed returns should open a PPF account.

How does an online PPF Calculator Work?

An individual can easily calculate his/her PPF interest and thus, the maturity amount for a particular tenure with the help of the online PPF calculators. A number of Public Provident Fund calculators are available online and can be used for this purpose. They are free of cost and very easy to use.

The interest in PPF is calculated using a very simple formula. The formula can be expressed as follows:

F = P[ {(1+i)n-1 }/i] where,

F stands for the maturity amount of the PPF
P stands for the annual installments paid
n stands for the number of years or tenure of the PPF
i stands for the rate of interest.

However, in case you use a PPF calculator to calculate the same, you can feed the details with respect to the investment amount and tenure of the PPF and know the estimated amount very easily. It should be noted that the interest on PPF is compounded on a yearly basis.

Apart from the PPF calculator being an easy tool to use, it also provides accurate details. There are various PPF calculators available online. Depending on the PPF interest rate for the financial year, calculations are made.

Given below is an example of how the PPF calculator works:

Suppose, an individual pays an annual amount of ₹ 1,50,000 in their PPF investment for a period of 15 years at an interest rate of 7.1% then his/her maturity sum at the closing year will be equal to ₹ 40,68,209.

How PPF return Calculator Can Help You?

Using a PPF calculator to estimate the returns can be a big help when you are planning your investments:

The calculator resolves your many questions on how the account works. You can have a clear picture of how much returns you can expect on investing a certain amount.
You can use the calculator over and over again until you strike a balance between how much you must invest to get the desired returns.
Since this is automated, manual calculations can be skipped and errors can be avoided.
You can make use of the calculator at the tax-planning stage so you can plan your investments better.
You can extend the PPF account over and above the lock-in period, so you can figure out how much time you have for retirement and how much wealth you can grow up to that point.

Tax benefit of PPF

The PPF amount calculated using the PPF return calculator has the following tax benefits as per its, act 1961 -

You can claim deductions under section 80c of it act 1961, for the PPF deposits. under 80c, ₹ 1,50,000 is the maximum allowed deduction one can claim per year; provided all investments are inclusive of such claims.
Apart from 80c, PPF interests are also tax-free. even PPF proceeds and accounts are not applicable to wealth tax.