Quick Answer: How is PPF Maturity Calculated?
PPF maturity is calculated using compound interest formula M = P × [((1+i)^n - 1) / i] × (1+i) at the current government rate of 7.1% p.a. Interest is calculated monthly on the lowest balance between the 5th and the end of the month, compounded annually, and credited on March 31st. For a maximum deposit of ₹1,50,000/year over 15 years, your final maturity corpus is ₹40,68,209 (including ₹18,18,209 in 100% tax-free interest).
What is a PPF Calculator & How Does Public Provident Fund Work?
The Public Provident Fund (PPF) is a sovereign, government-backed long-term savings and investment instrument introduced by the Ministry of Finance in 1968. Designed to foster small savings and provide retirement security for self-employed individuals, salaried employees, and unorganized sector workers across India, PPF combines capital safety, fixed returns, and unmatched tax benefits under the Income Tax Act.
The primary hallmark of a PPF account is its sovereign backing: because the funds are backed directly by the Government of India, the principal investment and accrued interest carry zero credit risk. Furthermore, PPF balances are legally protected against court attachments under civil or commercial litigation decrees.
PPF Wealth Accumulation over 15 Years (₹1,50,000 Annual Deposit at 7.1%)
Illustrative year-by-year comparison of total principal invested vs cumulative interest earned
Current PPF Interest Rate FY 2025-26 & Compounding Mechanics
For Q1 FY 2025-26, the official PPF interest rate stands at 7.1% per annum, compounded annually. The Ministry of Finance evaluates and announces interest rates for small savings schemes on a quarterly basis based on benchmark government bond yields.
💡 The Golden 5th-of-the-Month Deposit Rule
Under PPF Rule 2019, monthly interest is calculated on the minimum balance held in the account between the 5th day and the last day of every calendar month. Therefore, if you deposit your monthly contribution on or before the 5th of the month, that deposit earns interest for the entire month. If deposited on the 6th or later, that month's interest is lost on the new deposit.
Maturity Corpus Breakdown (Principal vs Interest Earned)
Distribution of ₹40,68,209 final PPF corpus after 15 years of max ₹1.5 Lakh annual contribution
PPF Calculator Year Wise: How ₹1.5 Lakh Annual Investment Grows over 15 Years
Below is a detailed calculation assuming a investor deposits the maximum statutory limit of ₹1,50,000 at the start of every financial year (before April 5th) at a constant interest rate of 7.1% p.a.:
| Financial Year | Opening Balance | Annual Deposit | Interest Earned (7.1%) | Closing Balance |
|---|---|---|---|---|
| Year 1 | ₹0 | ₹1,50,000 | ₹10,650 | ₹1,60,650 |
| Year 2 | ₹1,60,650 | ₹1,50,000 | ₹22,056 | ₹3,32,706 |
| Year 5 | ₹7,21,154 | ₹1,50,000 | ₹61,852 | ₹9,33,006 |
| Year 10 | ₹19,00,819 | ₹1,50,000 | ₹1,45,608 | ₹21,96,427 |
| Year 15 (Maturity) | ₹36,58,459 | ₹1,50,000 | ₹2,70,401 | ₹40,68,209 |
* Summary: Total Principal Invested = ₹22,50,000 | Total Tax-Free Interest Earned = ₹18,18,209 | Final Maturity Corpus = ₹40,68,209.
PPF Calculator with Existing Balance & Extension Rules (5-Year Blocks)
Upon completing the standard 15-year maturity period, an account holder has three distinct options:
1. Complete Maturity Withdrawal
Withdraw the entire accrued maturity corpus (principal + interest) 100% tax-free and close the PPF account.
2. Extend WITH Fresh Contributions
Submit Form H within 1 year of maturity to extend the account in 5-year blocks. You continue making annual deposits up to ₹1.5L and earning 80C deductions.
3. Extend WITHOUT Fresh Contributions
Default mode if no action is taken. The existing corpus continues to earn 7.1% annual interest tax-free. You can withdraw up to 100% balance in one withdrawal per year.
PPF Tax Benefits: 100% Exempt-Exempt-Exempt (EEE Status)
Public Provident Fund is one of the rare financial instruments in India that enjoys absolute EEE (Exempt-Exempt-Exempt) tax status:
- Exempt on Investment (Stage 1): Annual deposits up to ₹1,50,000 qualify for tax deduction under Section 80C of the Income Tax Act (under the Old Tax Regime).
- Exempt on Accumulation (Stage 2): Annual interest credited to your PPF account is 100% tax-free under Section 10(11) and does not need to be added to taxable income.
- Exempt on Maturity (Stage 3): The entire final maturity withdrawal amount (principal + accumulated interest) is completely tax-free.