How Does A PPF Account Calculator Work?

It is easy to make a resolution to save money, but it’s challenging to follow it. The real challenge about it is consistency. You can create budgets but stick to them only for a while. This is why creating your ideal savings fund can become difficult.

But we are blessed to live in a tech-savvy world. Life has become easier; there are only a few things that technology cannot handle. Even something as difficult as savings has become easier. All thanks to efficient savings schemes and the related next-gen tools such as a PPF account calculator.

A PPF account calculator is an advanced tool you can use if you are planning to invest in PPF.

We will be telling you all about a PPF account calculator in this elaborated guide. But before we start, let’s enlighten you about a PPF scheme if you aren’t aware of it and haven’t considered investing in it.

Benefits of Investing in the PPF scheme                

A Public Provident Fundis an investment cum savings scheme designed by the Government of India that offers you a handful of benefits. Here are a few most important ones:

  1. Option to Extend Tenure Indefinitely:

A PPF account comes with a tenure of 15 years. However, if you want to extend the tenure, you have the option to do so. You can extend the tenure indefinitely as per your preferences. If your goal is to earn higher returns and stay invested for a longer duration, you can use a PPF account calculator to determine how long you should invest to get the returns you are expecting from the scheme.

  • Low-Risk and Guaranteed Returns:

A Public Provident Fund is an ultra-safe savings option for individuals who look for investment safety over high returns. As PPF is a government initiative and offers guaranteed returns according to the PPF interest rate, it is a better alternative than other market-linked assets that offer you returns according to the market trends when it comes to investment safety. To calculate your guaranteed returns, feel free to use a PPF account calculator.

  • Loan Against PPF and Partial Withdrawal Options          

With a Public Provident Fund account, you can secure loans by mortgaging them. PPF offers a loan collateral facility to help individuals avail of loans easily. In addition, you are also allowed to make partial withdrawals. A subscriber can withdraw up to 50% of the amount of the PPF Account after seven years of opening the account.

  • Tax Benefits:

To encourage individuals to invest in PPF, certain tax benefits introduced by the Government of India are in place. These tax benefits offer tax deductions on investments made up to the limit of INR 1,50,000 without having anything to do with your income tax slab rate. In addition, the withdrawal value is entirely tax-free. The investor is not required to pay any taxes on it.

  • Flexible Investment Amount:

A subscriber can decide the amount of investment as per their requirement. However, the minimum amount that can be invested is INR 500, and the maximum amount is INR 1,50,000. You can use a PPF account calculator if you are facing any difficulty knowing the right amount to invest.

  • Power of Compounding:

What makes PPF a go-to savings scheme is the power of compounding. The compound interest accumulated aids in the creation of wealth. You can use a PPF account calculator to calculate the compound interest you will be accumulating at the end of the investment tenure.

How Does a PPF Account Calculator Work?

A PPF account calculator requires the user to enter investment-related information in the fields to compute results. It is on the basis ofthe information a PPF account calculator estimates the maturity amount. This information includes investment amount, rate of interest and investment duration.

The result is calculated through the compound interest formula.

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


F = maturity amount,

P = annual investment

I = Interest rate

N = Amount of times interest is compounded in a year

Why Use a PPF Account Calculator?

Here are a few reasons why you must use a PPF account calculator:

  1. It is free.
  2. It is easy to use.
  3. It spares you the complex calculations.
  4. It saves time.

The Bottom Line

If you are thinking of subscribing toa PPF savings scheme, you should definitely use a PPF account calculator that can help you calculate your returns on investment. So, what are you waiting for? Use the tool and reap the results.