Methodology
PPF Calculator Methodology
Annual maturity value of a Public Provident Fund account at the prevailing government-notified rate.
By Yadav PatleLast updated:
Formula
FV = Σ Cy × (1 + r)^(N − y + 1)
Variables
| Symbol | Name | Description |
|---|---|---|
| Cy | Yearly contribution | Amount deposited in year y, capped at ₹1.5 lakh per year per the PPF Act. |
| r | Annual interest rate | Notified by the Ministry of Finance every quarter; current default = 7.1% p.a. |
| N | Tenure | Default 15 years; can be extended in blocks of 5 years. |
| y | Year index | Iterates from 1 to N. |
Worked example
₹1,50,000 deposited each year for 15 years at 7.1% → maturity ≈ ₹40.68 lakh. Of that, ₹22.5 lakh is principal and ₹18.18 lakh is tax-free interest.
Assumptions and limitations
Every model leaves something out. Here is what this calculator assumes, and what it does not model, so you can interpret the output honestly:
- Interest is compounded annually based on the lowest balance between the 5th and last day of each month. The calculator approximates this by using the year-end contribution model.
- Rate is held constant for the tenure. In reality, the rate is reset quarterly.
- Premature partial withdrawals (allowed after year 5) are not modelled.
- Tax treatment is EEE (Exempt-Exempt-Exempt) under Section 80C. Both the contribution, interest, and maturity are tax-free up to the ₹1.5 lakh annual 80C cap.
Authoritative sources
Where the formula, rates, or framework come from:
Try it now
Plug in your own numbers in the PPF Calculator and see the formula applied in real time.
This methodology page is for educational purposes only. Calculations are estimates; real-world results vary with taxes, fees, expense ratios, and market conditions. Yadav Patle is not a SEBI-registered investment adviser. For personalised advice, consult a registered adviser.