The Public Provident Fund (PPF) is a popular government savings scheme. It is an excellent investment option to realize long-term goals, such as owning a house or funding your children’s higher education. It is critical to have a sound financial plan to ensure that you are on track to fulfill your monetary requirements. This is where a PPF calculator comes in handy. Using a PPF calculator, also called a PPF maturity calculator, you can estimate the amount accumulated by your PPF account at a given time.
What Is a PPF Calculator?
A PPF maturity calculator is a simulation designed to help individuals calculate their returns and the amount amassed by their PPF account over time. The calculator requires you to enter specific details to assist you in calculating the returns. Using this calculator, you can decide the amount that must be invested and the investment tenure required to achieve your goals.
How Does a PPF Calculator Work?
A PPF calculator needs you to enter the following details of your PPF investment:
- Yearly investment (you can invest up to Rs 1.5 lakh a year)
- Your investment tenure
- Expected rate of return on your investment (it is revised every quarter)
Upon entering the details above, a PPF calculator will display the amount your PPF account would have accumulated at the end of your investment tenure.
A PPF calculator works on the formula mentioned below:
A = P [ ( { (1+i) ^n} – 1 ) ÷ i ]
where,
A – Amount accumulated at the end of your investment tenure
P – Yearly investment (in Rs)
n – Your investment tenure (in years)
i – Expected average annual rate of return
Consider the following example:
Suppose you invest Rs 1 lakh a year in a PPF account for 15 years, and if the expected average annual rate of return is 7.5%, then the following table shows how much your PPF account would have accumulated at the end of 5, 10, and 15 years:
| Year | Amount Invested | Amount Accumulated | Your Returns |
| 5 | Rs 5,00,000 | Rs 6,24,402.03 | Rs 1,24,402.03 |
| 10 | Rs 10,00,000 | Rs 15,20,811.91 | Rs 5,20,811.91 |
| 15 | Rs 15,00,000 | Rs 28,07,724.21 | Rs 13,07,724.21 |
Advantages of PPF Calculator
The following are the most significant advantages of a PPF calculator:
- A PPF calculator helps you estimate the return on your PPF investment and is straightforward.
- You can estimate the amount your PPF account would accumulate over time and plan your finances accordingly.
- You can understand the impact of modifying your investment amount, tenure, and a change in the interest rate on your PPF investment.
Investing in PPF entitles you to claim a tax deduction of up to Rs 1.5 lakh a year under Section 80C. Using a PPF return calculator, you can estimate your returns and stay on track to achieve your financial goals.
