PPF- Calculator, Interest Rates, Withdrawal & Tax Benefits

The first step towards wealth management is accumulating savings. You will find a lot of options for savings accounts; however, look for the ones that guarantee substantial returns risk-free. PPF accounts are one of the most common features which come into the picture. PPF account refers to Public Provident fund account and is meant to invest your valuable capital. If you are a new employee or a responsible parent 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. Easily calculate your PPF Interest now.

This article answers below mentioned points on PPF:

  1. What is PPF ?
  2. How to open a PPF Account ?
  3. What are the essential features of PPF ?
  4. What are the Tax Benefits of investing in PPF ?
  5. What is the Mode of Tax Savings through PPF?
  6. How is PPF interest calculated?
  7. What are the PPF Withdrawal Rules ?
  8. What is the Procedure for withdrawal from PPF?
  9. What are the Alternative Investment Options to PPF ?
  10. Frequently Asked Questions
​1.What is PPF?

Public Provident Fund (PPF), introduced in India in 1968 with the objective to mobilize small savings in the form of an investment, coupled with a return on it. It still remains a favourite 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.PPF), introduced in India in 1968 with the objective to mobilize small savings in the form of an investment, coupled with a return on it. It still remains a favourite 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.

​2.How to open a PPF Account?

A PPF account can be opened with either a Post Office or with any nationalized bank like the State Bank of India or Punjab National Bank, etc. These days, even certain private banks like ICICI, HDFC and Axis Bank among others are authorized to provide this facility. You need to submit the duly filled application form along with the required documents i.e. the KYC documents like identity proof, address proof, and signature proof. Post submitting these documents you can deposit a prescribed amount towards the opening of the account.

​3.What are the essential features of PPF ?

    • Tenure: The PPF has a minimum tenure of 15 years, which can be extended in blocks of 5 years as per your wish.
    • Investment Limits: PPF allows a minimum investment of Rs 500 and a maximum of Rs 1.5 lakh for each financial year. Investments can be made in lump sum or in a maximum of 12 instalments.
    • Opening Balance: The account can be opened with just Rs 100. Annual investments above Rs 1.5 lakh will not earn interest and will not be eligible for tax saving.
    • Deposit Frequency – Deposits into a PPF account has to be made at least once every year for 15 years.
    • Mode of deposit – The deposit into a PPF account can be made either by way of cash, cheque, Demand Draft or through an online fund transfer.
    • Nomination – A PPF account holder can designate a nominee for his account either at the time of opening the account or subsequently.
    • Joint accounts – A PPF account can be held only in the name of one individual. Opening an account in joint names is not allowed.
    • Risk factor –  Since PPF is backed by the Indian government, it offers guaranteed, risk­-free returns as well as complete capital protection. The element of risk involved in holding a PPF account is minimal.
    • Who can invest in PPF – Any Indian citizen can invest in PPF. One citizen can have only one PPF account unless the second account is in the name of a minor. NRIs and HUFs are not eligible to open a PPF account.
    • Loan against PPF –  You can take a loan against your PPF account between the 3rd and 5th year. The loan amount can be a maximum of 25% of the 2nd year immediately preceding the loan application year. A second loan can be taken before the 6th year if the first loan is repaid fully.
​4.What are the tax benefits of investing in PPF?

PPF is one investment vehicle that falls under the Exempt-Exempt-Exempt (EEE) category. This, in other words, means that all deposits made in the PPF are deductible under Section 80C of the Income Tax Act. Furthermore, the accumulated amount and interest is also be exempt from tax at the time of withdrawal.

It is important to note that a PPF account cannot be closed before maturity. A PPF account, however, can be transferred from one point of designation to another. But, do remember that a PPF account cannot be closed prematurely. Only in the case of the account holder’s demise can the nominee’s file for the closure of the account.

PPF contributions made every year are eligible for tax deductions under Section 80C of the Income Tax Act, 1961. The deductions can be claimed by anyone for the same limit. The deduction limit for PPF deposits was Rs.1 lakh which has been increased to Rs.1.5 lakhs from FY 2014-15. PPF accounts also have a maximum deposit limit of Rs.1.5 lakhs per year, therefore, all deposits made to your PPF account can be claimed as deductions u/s 80C. Section 80C allows for a maximum deduction of Rs.1.5 lakhs per year inclusive of all investment instruments.

PPF accounts also offer other tax benefits. Interests earned from PPF deposits are tax-free, while wealth tax is not applicable on PPF accounts and proceeds. Therefore, PPF accounts offer you triple exemption benefits – deduction on deposits, tax-free returns and no wealth tax.

​5.What is the Mode of Tax Savings through PPF?

Suppose your yearly income is Rs.6 lakhs. Your benefits with and without claiming deductions under Section 80C will be as follows:

Table 1. Tax Saving Chart for PPF
With deductionsWithout deductionsIncome
Rs.6 lakhsRs.6 lakhs
Exempted incomeRs.2.5 lakhsRs.2.5 lakhs
Deductions u/s 80CRs.1.5 lakhs-
Taxable income(6-2.5-1.5)=Rs.2 lakhs(6-2.5)=Rs.3.5 lakhs
Income tax (@ 20%)Rs.40,000Rs.70,000
Cess (@ 3%)Rs.1,200Rs.2,100
Net taxRs.41,200Rs.72,100

As you can see by investing in a savings instrument like PPF, you can potentially save Rs.31,900 in income taxes every year. And this does not include the benefits on the interests that you earn while staying invested in PPF. As such, PPF investments are a great opportunity at long term savings for everyone.

​6.How is PPF interest calculated?

The interest on PPF is compounded annually. The formula for this is: F = P[({(1+i)^n}-1)/i]

Here, F = Maturity proceeds of the PPF P = Annual instalments n = Number of years i = Rate of interest/100

For example, if you make annual payments of Rs.1,00,000 towards your PPF investment for 15 years at 8.0%, your maturity proceeds at the end of 15 years would be Rs. 31,17,276 .

Table for PPF Interest Rates till now.

PeriodYearPPF Interest Rates
1st April 2020 to onwards2020-217.1%
1st January 2020 to 31st March2019-207.9%
1st October 2019 to 31st December 20192019-207.9%
1st July 2019 to 30th September 20192019-207.9%
1st April 2019 to 30th June 20192019-208.0%
1st January 2019 to 31st March 20192018-198.0%
1st October 2018 to 31st December 20182018-198.0%
1st July 2018 to 30th September 20182018-197.6%
1st April 2018 to 30th June 20182018-197.6%
1st January 2018 to 31st March 20182017-187.6%
1st October 2017 to 31st December 20172017-187.8%
1st July 2017 to 30th September 20172017-187.8%
1st April 2017 to 30th June 20172017-187.9%
01st January 2017 to 31st March 20172016-178.0%
1st October 2016 to 31st December 20162016-178.0%
1st July 2016 to 30th September 20162016-178.1%
1st April 2016 to 30th June 20162016-178.1%
1st April 2015 to 31st Mar 20162015-168.7%
1st April 2014 to 31st Mar 20152014-158.7%
​7.What are the PPF Withdrawal Rules ?

As a rule, one can close a PPF account only upon maturity i.e. after the completion of 15 years. Upon completion of 15 years, the entire amount standing to the credit of an account holder in the PPF account along with the accrued interest can be withdrawn freely and the account can be closed.

However, if account holders are in need of funds, and wish to withdraw before 15 years, the scheme permits partial withdrawals from year 7 i.e. on completing 6 years.

An account holder can withdraw prematurely, up to a maximum of 50% of the amount that is in the account at the end of the 4th year (preceding the year in which the amount is withdrawn or at the end of the preceding year, whichever is lower). Further, withdrawals can be made only once in a financial year.

The PPF account matures after completion of 15 years calculated from the day the account was opened. After maturity, the entire PPF account balance can be withdrawn. However, after the end of the 6th year, PPF subscribers are allowed to make partial withdrawals from their account. The qualifying amount for partial PPF withdrawal is automatically calculated by the PPF calculator and is the lesser of the following amounts:

Option1. 50% of the PPF account balance in the year preceding the year of a loan application or

Option2. 50% of the PPF account balance in the 4th financial year preceding the year of the loan application.

​8.What is the Procedure for withdrawal from PPF?

In case you wish to partially or completely withdraw the balance lying in your PPF account, you can do so by submitting an application for withdrawal in Form C with the concerned branch of the bank where your PPF account lies. This form is available for download here.

This form has 3 sections:

1. Declaration section where you must provide your PPF account number and the amount of money you propose to withdraw. Along with that, you also need to mention how many years have actually passed since the account was first opened. 

2. Office use section which comprises of details like:

  • Date when the PPF account was opened.
  • Total balance standing in the PPF account.
  • Date on which the previously requested withdrawal was allowed.
  • Total withdrawal amount available in the account.
  • The amount of money sanctioned for withdrawal.
  • Date and signature of the person in charge – usually the service manager.

3.  Bank details section which asks for the details of the bank where the money is to be credited directly or the bank in whose favor the cheque or the demand draft is to be issued.

It is also mandatory to enclose a copy of the PPF passbook along with this application.

​9.What are the Alternative Investment Options to PPF ?

Section 80-C provides PPF with EEE benefit (Exempt, Exempt, Exempt). This means that an investment up to Rs. 1.5 lakhs annually, the returns you earn and the corpus when the fund matures are all exempted from taxation. Now what can compare to this? Your answer is ELSS. Though ELSS has the lowest lock-in period, you can opt for this as a long-term investment (< 5 years). The longer you invest, more tax you will save not to mention earn inflation-beating returns. Few alternate options to PPF


What is maturity period of PPF account?

The lock-in period of PPF account is 15 years from the date of opening.

Can we continue PPF after 15 years?

After the 15 years lock-in period you can extend its maturity by submitting an application. You can extend your PPF account for a block of 5 year.

When we can withdraw PPF amount?

After the lock-in period of 15 years subscriber can be withdrawn full amount. As well subscriber can withdraw partial amount before maturity period from the 7th financial year, of an amount that does not exceed 50% of the balance of the customer credit at the end of the fourth year immediately preceding the year of withdrawal or the amount at the end of the preceding year, whichever is lower.

Can we extend tenure with contribution?

you can extend your PPF account for a five year block by submitting Form H in bank within one year from the date of maturity. You can deposit money during the tenure. After completion of five year you can again apply for extension as there is no limit in the number of extensions.

Can we get loan against PPF account?

Yes, you can. Loan facility can be available from 3rd financial year up to 5th financial year. Read more.

What if failed to deposit money to ppf account?

If you are failed to invest minimum amount in any financial year, then account will be deactivated. It can be reactive to pay Rs.50 as penalty for each inactive year. Also you have to deposit Rs.500 for each inactive year's contribution.

Can we define nominee to PPF account?

Ofcourse, you can. You can define your nominee to one or more persons. You can also define shares to each nominee. In case death of account holder then the balance amount will be paid to his nominee or legal heir even before 15 years. Nominees or legal heirs are not eligible to continue the account of the deceased.

Can we close PPF Account before maturity period?

The Public Provident Fund Scheme, 2016 made an amendment in PPF Scheme, 1968 to facilitate premature closure of PPF account. You can opt for premature closure of your PPF account after completion of 5 years for medical treatment of family member and for your higher education. In case of premature closure, you are required to pay 1% of your balance amount as penalty to bank.

When will PPF interest rate change?

PPF interest rate is changing every year so subscribers should keep eye on it. However, there is no pre-determined dates when the ppf interest will be change. But if you are subscriber then you need to keep in mind that the PPF interest rate revision will usually happen during the last week of March in a financial year and will come into effect during 1st April. Some times the revision in Interest Rate will change during April and the same will be implemented / comes into force during April 1st week of the same year.

Is PPF amount tax free?

Yes, Deposits made under this scheme can be claimed as deductions under section 80C. Interest earned on these deposits are also tax-free.

How much tax can be save on PPF?

You can invest Rs. 1,50,000 in PPF and you can save applicable tax on this amount.

Can I deposit more than 1.5 lacs in ppf?

A PPF account holder can deposit a maximum of Rs 1.5 lacs in his/her PPF account (including those accounts where he is the guardian) per financial year. Any amount deposited in excess of Rs 1.5 lacs in a financial year won't earn any interest.

How many times we can deposit money in PPF account in a month?

There is no monthly deposit provision so you can deposit more than 2 times but maximum 12 times in a financial year.

Which is the best bank to open a PPF account ?

All the nationalized banks are good to open PPF account. Generally, SBI is India's largest and trusted bank so most people's go with SBI.

What is maximum lock in period in ppf account?

The maximum lock-in period of PPF account is 15 years from the date of opening.

Can we withdraw money from ppf account?

Yes, you can withdraw partial amount from the 7th financial year.

Which bank gives highest ppf interest rates?

The Public Provident Fund (PPF) is a savings-cum-tax-saving scheme is introduced by National Saving Institute of the Ministry of Finance and it's not a product of any particular bank so ppf interest rate will same for all the banks as well as post offices.

Can I withdraw money from ppf account before maturity?

Yes, you can withdraw partial amount before maturity.

Is ppf good?

PPF is a very good investment/tax saving option.

Can I take loan from PPF account?

Yes, you can. Loan facility can be available from 3rd financial year up to 5th financial year.

Is PPF withdrawal taxable?

PPF partial withdrawals are not taxable.

Is PPF taxable?

PPF falls in the category of EEE (Exempt Investment, Exempt Return, Exempt Maturity or Withdrawal).Thus, both the deposits and withdrawals are totally tax free.

Is PPF Safe?

Yes, PPF is very safe and long term investment.

How can I get maximum PPF benefits?

PPF interest is no longer fixed and is now depends on government bonds. The interest calculation is done every month and calculated on lowest balances in account between 5th and last day of the month. So if you would like to earn interest for that month then deposit amount on or before 5th of the month.

How many PPF account can a family have?

A family can have multiple PPF accounts: one for each father, wife and one for each child, and so on.

Can a housewife open a PPF account?

Yes, housewife can open PPF account. In addition, husband may deposit own money into her PPF. But since she doesn't have any taxable income, she cannot avail any tax benefit for it. And husband cannot claim any tax benefit on her PPF investments.

Can we deposit cash in ppf account?

Yes, you can. Amount can be deposited in cash, cheque or via demand draft.

Can I open two ppf account in sbi?

No, as per rule, One person can keep only one PPF account but one can maintain another ppf account of spouse/children on behalf of them.

Which bank offers ppf account?

Most nationalized banks are providing facility for ppf account but it depends on branch category. Visit here for List of Banks offering PPF Account & Online Fund Transfer Facility

Can I increase ppf amount?

Yes, you can change deposit amount. You have to deposit the minimum of Rs. 500 in a financial year and maximum Rs. 1, 50,000.

How can I withdraw money from my PPF account after maturity?

You should close your current ppf account to withdraw money after maturity and you will get your money.

Can PPF be withdrawn before maturity?

Yes, you can withdraw partial amount from the 7th financial year.

Is amount received from PPF Taxable?

No, It's tax free.

Can we continue PPF after 15 years?

Yes, you can extend block of 5 years after 15 years.

Can PPF account be extended after 15 years?

You can extent with blocks each of 5 years.

What is different between PPF and EPF account?

EPF is a special mandatory savings scheme only for salaried employees working in government and private sector subject to certain thresholds. Non salaried individuals such as businessmen, self employed professionals are not covered under EPF. The EPF scheme may be run by the respective employer through its own trust or by way of depositing the contributions with EPFO, a government run body that manages EPF money. A salaried person who is covered under EPF is eligible to also open a PPF account.

Is investment in PPF risky?

No, it is not. PPF invests in government bonds. These bonds are backed by the Government of India. The government securities are considered the most secure investment. Your investment is as much risk as the risk of government default. So your investment in PPF are very safe.

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