Why is PPF considered such a good deal?

Because it is EEE — exempt at all three stages. The deposit is deductible under 80C, the interest is exempt, and the maturity amount is exempt. A 7.1% tax-free return is equivalent to roughly 10.2% before tax for someone in the 30% slab, which no comparable fixed-income product matches at that risk level.

What happens if I deposit more than ₹1.5 lakh?

The excess earns no interest at all and gets no 80C deduction. It simply sits in the account until it is returned. The limit is per person across all PPF accounts, so you cannot open a second account to deposit more — though you can contribute to a minor child account, subject to a combined limit.

Can I withdraw before 15 years?

Partially. From the seventh year you may withdraw once a year, up to 50% of the balance at the end of the fourth preceding year. A loan is available between years three and six at a small spread over the PPF rate. Full premature closure is allowed only for serious illness, higher education, or a change of residency status, and costs one percentage point of interest across the whole term.

How often does the interest rate change?

The government reviews small savings rates quarterly, and the PPF rate has ranged from around 7% to 8.8% over the past decade. The rate applies to your balance for that quarter, so a long-running account earns whatever the prevailing rate is rather than the rate at which it was opened.

PPF Calculator: 15-Year Maturity and Interest

How to use this calculator

Enter your annual deposit. Anything above ₹1,50,000 earns no interest.
Enter the interest rate — currently around 7.1%, reviewed quarterly.
Choose the term: 15 years, or extended in blocks of five.

How the calculation works

PPF compounds annually, and each year’s deposit compounds for whatever term remains:

M = Σ  P × (1 + r)^(N − y + 1)

The first deposit compounds for all 15 years; the last for one. This models a deposit at the start of each financial year, which is both the optimal strategy and what official calculators assume.

A worked example

₹1,50,000 a year at 7.1% for the full 15 years.


Maturity value	₹40,68,209
Total deposited	₹22,50,000
Interest earned	₹18,18,209
Tax saved at 30% slab	₹6,75,000

You deposit ₹22.5 lakh and receive ₹40.7 lakh — and every rupee of it is tax-free.

Why PPF is unusually good

It is EEE — exempt at all three stages:

The deposit is deductible under 80C
The interest is exempt as it accrues
The maturity amount is exempt

Very few instruments in India are exempt at all three. A 7.1% tax-free return is equivalent to roughly 10.2% before tax for someone in the 30% slab. No comparable fixed-income product matches that at the same risk level — and the risk is sovereign, since it is a government scheme.

Deposit before the 5th of April

This is the single most valuable operational detail.

Interest is calculated on the lowest balance between the 5th and the last day of each month. A deposit made on the 6th earns nothing for that entire month.

So depositing ₹1,50,000 on 5th April rather than 31st March of the following year earns a full extra year of interest on that instalment — roughly ₹10,650 in the first year alone, compounding thereafter.

If you cannot deposit a lump sum, deposit monthly before the 5th.

The ₹1.5 lakh cap

The annual limit is per person, not per account. Depositing more does not just fail to earn extra interest — the excess earns nothing at all and gets no 80C deduction. It simply sits there until returned.

You cannot open a second account in your own name. You can contribute to a minor child’s account, but the combined limit still applies to you.

Withdrawals and loans

PPF is a 15-year lock-in, but not absolutely rigid:

Loan between years 3 and 6, at a small spread over the PPF rate
Partial withdrawal from year 7, once a year, up to 50% of the balance at the end of the fourth preceding year
Premature closure only for serious illness, higher education, or a change of residency status — and it costs one percentage point of interest across the entire term

Extending beyond 15 years

At maturity you can extend in five-year blocks, with or without further contributions. The effect is substantial because the base has grown so large:

Term	Maturity at ₹1.5L/year, 7.1%
15 years	₹40,68,209
25 years	₹1,03,08,015

Ten more years of the same deposit produces more than double — most of it interest on interest. An extended PPF is one of the most effective retirement vehicles available to a salaried Indian.

Is PPF still worth it under the new tax regime?

The 80C deduction is unavailable in the new regime, so one of the three tax benefits disappears. The interest and maturity remain exempt.

That still makes it competitive: a 7.1% tax-free return beats a 7.5% taxable FD for anyone above the lowest slab. The case is weaker than before, not absent — and the sovereign guarantee plus the tax-free compounding remains hard to replicate.

Common mistakes to avoid

Depositing late in the financial year. Costs a full year of interest on that instalment. The most expensive habit in PPF.

Depositing after the 5th of the month. Costs a month of interest each time.

Treating the rate as fixed. The government reviews small savings rates quarterly. PPF has ranged from about 7% to 8.8% over the past decade, and the prevailing rate applies to your balance — not the rate when you opened.

Letting the account lapse. A minimum of ₹500 a year is required. Miss it and the account is discontinued: no loans, no partial withdrawals, and a penalty of ₹50 per dormant year plus arrears to revive it.

Using it for short-term goals. The 15-year lock-in is the point. Money you might need in three years belongs in an FD or RD.

When this calculator is not the right tool

For monthly rather than annual deposits with a shorter horizon, use the RD calculator. For a market-linked long-term alternative with higher expected returns and real risk, compare against SIP. And for the tax impact of the 80C deduction itself, run both regimes through the income tax calculator.

PPF Calculator