PPF Calculator

PPF (Public Provident Fund) is a savings plan that allows individuals to save a part of their earnings each year in order to build a retirement corpus. Individuals who contribute to the PPF scheme are eligible to receive interest on the principal amount along with tax-saving benefits too. It was introduced to encourage people who are not covered by the Employee Provident Fund Organization (EPFO) to save and build a retirement fund.

Understanding PPF

Explained below are a few important points that you must know about the Public Provident Fund-

• The PPF scheme is a tax-saving investment option that secures the financial future of the individual in the long term
• Along with the benefit of creating the post-retirement fund, PPF provides an opportunity for the individual to gain tax benefits up to the maximum limit of Rs.1.5 lakh on the contributed amount
• Moreover, the interest earned on the invested amount and the maturity amount is tax exempted under Section 80C of the IT Act
• With a lucrative interest rate of 7.1% (compounded annually), PPF is best suitable for investors who want to have secured investment and gain guaranteed return in the long term

What is a PPF Calculator?

A PPF calculator helps you figure out how much returns you would be able to generate at the end of your investment tenure upon investing a particular amount of money in a PPF account. To find out this amount, you only need to figure out the amount that you wish to invest on a regular basis. After entering this amount in a PPF calculator, it will assume your investment tenure to be 15 years and will calculate your returns considering the prevalent interest rate.

How does the PPF Calculator Work?

A PPF calculator works on the following formula-

F = P[({(1 + i) ^ n}-1)/i]
Where,
F = Maturity proceeds of the PPF
P = Annual installments
n = Number of years
i = Rate of interest/100

Now, let’s take an example to understand this better-

Suppose, you make annual payments of Rs. 1,00,000 towards your PPF account for a time period of 15 years at 7.1%.

Now, according to the above formula, your maturity proceeds at the end of 15 years would be -

F = P[({(1+i)^n}-1)/i]
F = 1,00,000[({(1 + 7.1/100)^15}-1)/7.1/100]
F = Rs. 31,17,276

Hence, the total amount that you would accumulate in your PPF account at the end of 15 years would be Rs. 31,17,276 if you invest Rs. 1,00,000 to your PPF account annually.

How to Calculate Funds Using PPF Calculator?

To calculate your accumulated funds using a PPF calculator, you simply need to enter a few details related to your PPF investment such as the amount of your investment and frequency of your investment. The PPF calculator would automatically take your investment tenure to be 15 years as it is the minimum time period to invest in a PPF account. The estimated rate of interest would be considered as that on the present day.

Your accumulated investment PPF amount would be shown in a few seconds on your PPF calculator!

Benefits of Using a PPF Calculator

A PPF calculator must be used to calculate the accumulated funds in a PPF account for the following reasons-

• It clearly shows how much amount you would be able to accumulate at the end of your investment tenure. This can help you get a fair idea of whether or not your long term financial goals would be met
• Using a PPF calculator eliminates the need to perform complex calculations and spend long periods of time in figuring out if investing in a PPF account is the right option for you
• Given that the calculations using a PPF calculator are automated, it avoids the chances of errors in calculations entirely
• You can use the calculator as many times as you wish to and calculate how much more or less amount you need to invest in your PPF account

Who should Invest in PPF?

Only the following employees are eligible to get their funds invested in EPF-

• Only Indian citizens are eligible to open a PPF account
• An Indian citizen residing in another country may continue to operate his or her PPF account
• Parents/guardians can open a PPF account on behalf of their minor children

*It should be noted that joint and multiple accounts are not allowed to be opened

Check your PPF Balance Online

Following are the steps to check PPF balance online-

• Link your existing bank account with the PPF account
• Net banking should be enabled to check PPF balance online
• Next, access the bank's internet banking portal
• and Find a section where you can check your PPF balance and status

Note

• The procedure to check PPF balance online may differ from one bank to the next
• If you have an inactive net banking facility, it is best to get it activated as soon as possible
• It is recommended that the existing bank account be linked to the PPF bank account to perform various banking transactions

Wrapping it Up:

A PPF calculator helps you find out how much amount you would be able to accumulate at the end of your investment period if you continue to invest in a PPF account at monthly, quarterly or annual intervals. Using a PPF calculator saves a lot of time and effort involved in performing manual calculations and cancels out any chances of errors in the calculation. PPF calculator is a quick, convenient and simple method to decide whether or not your long term financial goals would be met by investing in an investment instrument like the PPF account.