PPF Calculator
August 02, 2023

What is a PPF Calculator?

A PPF calculator is an online financial tool that is designed to help users determine the returns they could generate on their investment in a Public Provident Fund account. The tool is designed to help investors to plan their investment in PPF as per their future goals and strategize the same accordingly. The online calculator is pre-fed with formulas that facilitate automated computation of PPF returns within a few seconds. 

However, individuals need to feed in a few key details of their Public Provident Fund investment to determine the estimated returns and more. These aspects make it crucial to understand how a PPF calculator works and could help plan an approach to build a robust corpus.

Read along to know more about the process. 

How to Find the Public Provident Fund Returns?

An online PPF calculator allows one to ascertain the returns one can expect to earn on their invested end at the end of the maturity period. Gaining an insight into the estimated returns due in advance helps understand whether the earnings would be enough to help achieve their long-term goals or if they should readjust their approach.

A PPF calculator typically factors in the 15-year investment period or tenure and the scheme’s interest rate to help compute the estimated earnings. Notably, the interest paid on PPF is computed annually. One can calculate the maturity amount by using this formula - 

 F = P[({(1+i)^n}-1)/i]

Here,

F stands for the maturity amount

P stands for the annual investment amount

n stands for the investment period

I stands for the interest rate/100

Notably, using the formula manually would help calculate the returns but the process will involve multiple steps, making it lengthy and time-consuming. This also makes the process prone to mistakes which are bound to affect the accuracy of the result.

Example of PPF Calculation

Harsh plans to invest Rs.1,00,000 in a Public Provident Fund account for 15 years at an annual interest rate of 7.1%. Based on the formula -

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

= 1,00,000[({(1+7.1%)^15}-1)/7.1%]

At the end of 15 years, Harsh will receive Rs. 31,17,276 from the PPF account. Though Harsh has the option to calculate PPF returns manually, he can also use an online PPF calculator to determine the maturity amount with half the time and effort.

Rafique can either choose to compute the proceeds on maturity manually using this calculator or use a PPF calculator online. Rest assured, using a PPF calculator will allow him to arrive at the result quicker and within a few seconds. Additionally, the result will be accurate and devoid of errors that are common in manual calculation.

Moreover, the fact an online PPF calculator allows users to make multiple adjustments to the investment variables helps in financial planning. To elaborate, the investment calculator helps understand which combination of principal amount and tenure will generate enough returns to meet financial goals. 

How to Use an Online PPF Calculator?

Online PPF calculators have a user-friendly interface that makes the experience of computing PPF amount smooth and hassle-free. The simple interface also makes it easier for users to navigate the process even without possessing any in-depth knowledge about the PPF formula or calculation. However, users must know their investment details and have clarity in their financial goals to make the most of the PPF calculator for financial planning.

Take a look below to know how to use the tool below -

Step 1: Enter the intended investment amount

Step 2: Enter the investment tenure

Step 3: Enter the prevailing interest rate

Once these details are entered into the PPF calculator, the online tool will display the maturity amount within a few seconds. The tool also offers a breakdown of the maturity and interest amount.

How a PPF Calculator Can Help You?

A PPF calculator can prove useful in more than one way and helps strategize an investment approach to generate wealth.

Here’s how the tool comes in handy -

  • A PPF calculator allows users to determine which principal amount will help them generate wealth and build a substantial corpus.
  • It offers an accurate idea of the amount of money they would receive by the end of the investment tenure.
  • Individuals can readjust investment variables such as the principal amount and tenure to understand which combination will work the best and help them achieve their goals more effectively.
  • A PPF calculator is pre-loaded with a formula that shows results automatically and within a few seconds. This saves time and helps users to focus on their financial planning.

This is how an online PPF calculator helps users understand the savings plan better and help develop a suitable approach. However, before investing in a PPF scheme individuals should know a few things about it.

Things to Note About PPF Scheme

Keep these in mind before selecting the PPF scheme as your choice investment plan -

  • Lock-in period: A Public Provident Fund scheme comes with a lock-in period of 15 years. During this lock-in period, investors are not encouraged to withdraw funds prematurely. However, the same could be possible only in specific cases and may attract penalties.
  • Tenure: PPF allows investors to extend the investment tenure beyond the lock-in period of 15 years. Using a PPF calculator can they determine which tenure would be most suited for their goals and keep their funds invested for the same.
  • PPF account: Opening a PPF account is not really difficult. Interested individuals can avail of the PPF account opening service at all public banks, certain private banks, and even post offices.
  • Loan facility: Though PPF comes with a lock-in period of 15 years, account holders can withdraw funds after 7 years of holding period. They can also take out a loan against the accumulated PPF after the said holding period. 

  • Returns: The returns on PPF investment are better than the returns on any regular fixed deposit schemes. 

These features make PPF unique and lucrative for investors who are looking to build a corpus. However, it is recommended that before investing money into any scheme including PPF one should account for their risk-taking capacity.