# PPF Calculator – A tool to calculate your yields to maturity

A PPF Calculator is for anyone who is currently investing in PPFs or planning to do so in the coming years. This helps you get out of your indecision about how much investment you should start with and what return you will get on the amount invested. Additionally, once you have decided on the investment amount for a regular period, the PPF Calculator takes the 15 year period and current interest rates and presents you with the value at maturity. Let us understand this tool in detail.

## What is a PPF Calculator?

An online PPF calculator is a tool that helps you calculate the returns of your PPF investment plan. The Caisse Publique de Prévoyance or PPF helps you mobilize your savings and build up assets for retirement. Currently, you can earn interest at the rate of 7.1% on the PPF. The fact that interest is compounded annually on the PPF makes it a lucrative investment option. However, manually calculating interest and yields on PPF can be quite complicated. That’s where an online PPF calculator comes in!

Let’s see how a PPF calculator simplifies PPF interest and yield calculations.

## How to use a PPF calculator?

PPF calculators are easy to use. Much easier than manually calculating interest and returns! You can follow the steps below to use the PPF calculator:

**Step 1: **Enter the annual amount you wish to invest in the public provident fund.

**2nd step: **Enter the period for which you wish to invest. The PPF calculator automatically takes the 15 years as the investment period since PPF accounts have a lock-up period of 15 years.

**Step 3: **Enter the current interest rate applicable to the public provident fund.

Once you have entered the details above, the Public Provident Fund Calculator displays results, including the total amount you invested, the total interest you earned, and the value at maturity.

Let’s see the formula that is used to calculate this number.

## PPF calculation formula

Interest on public provident funds is compounded annually. The formula used to calculate the yields to maturity is given below:

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

Here, the variables represent the following:

F is the value at maturity of PPF

I is the interest rate

P represents the annual payments

N is the period in years

The above formula says that – the longer the investment period, the higher the returns you will earn.

For example, if you invest Rs. 2,00,000 in your PPF investment account for a period of 15 years at the current interest rate of 7.1%, then the value at maturity at the end of the period d investment will be Rs. 57,63,698.

## What are the benefits of using a PPF calculator?

The points listed below highlight the benefits of using an online PPF calculator:

- This helps you get a clear idea of how much interest you can earn at the end of the investment period on a given investment amount.
- It can also save you from paying heavy taxes.
- You can get a clear idea of how much return you will get at the end of the term period on a given amount of investment.
- You can use the PPF calculator as many times as you want until you arrive at the amount you can easily invest on a regular basis.
- There is no room for manual errors.
- You can better plan your investments.
- It gives an estimate of the total amount of investment you have made during a financial year.

## Points to keep in mind when investing in PPF

Below are the points you should keep in mind before you start investing in public provident funds:

- You receive PPF interest on the lowest balance you have in your PPF account between the 5th day and the end of the month.
- If you invest monthly in the PPF account, be sure to invest before the 5th of the month. If you invest after the 5th, it may have a marginal effect on your interest.
- If you invest before the 5th of each month, you will receive interest for the month in question on this deposit. Otherwise, you will receive interest on the previous balance of your PPF account.
- If you are making a lump sum payment, be sure to invest before April 5th. The interest you earn will be on more balance for April.

## FAQs

**Can the PPF account be transferred to another bank or branch?**

Yes. You have the freedom to transfer your PPF account to another bank branch.

**How much interest can PPF accounts earn you?**

The central government of India determines the rate of interest you will earn on your PPF investments. Currently, the interest rate on the PPF is 7.1% per annum.

**When does a PPF investment mature?**

The maturity of PPF investments is reached after a blocking period of 15 years. Once the 15-year period is over, you can withdraw your value at maturity.

**What are the advantages offered by PPF?**

PPF investments guarantee you fixed returns, interest accumulation, long-term investment opportunities and even tax advantages.

**What is the minimum blocking period for PPF?**

The minimum lock-up period for PPF investments is 15 years.

**What are the tax obligations of PPFs?**

The PPF investment is exempt from tax, including the value at maturity and the amount of interest. You do not have to pay tax up to Rs 1.5 lakh per year.