# How To Use PPF Account Calculator?

If you currently own or want to have an PPF Account than it is better to know the returns you can get from PPF by using PPF Account Calculator online. Public Provident Fund In short PPF is one of the safest investment products because the government of India guarantees your investments in the fund.

Moreover, your investment is tax exempt under section 80C of the Income Tax Act (ITA) and the returns earned from PPF are also not taxable.

In order to use PPF Account Calculator, You just need to enter the invested amount per year, and duration or tenure of the investment period.

Please, make sure the investment amount should not be less than Rs.500 and exceeds Rs.1,50,000 in a year, similarly the investment duration should not be less than 15 years or exceeds more than 50 years. As the minimum lock in period for PPF accounts is 15 years.

The current rate of interest (2024-25 Q1) from 01 January, 2024 on Public Provident Fund (PPF) is been kept at 7.1% p.a. which gets decided by the Government of India (GOI) every quarter, so you may not need to change that, the PPF Account Calculator will get updated rate of interest if changes made in future ROI in PPF funds.

So, go ahead and check how much you will get if you make investments in Public Provident Fund (PPF) in post office or any government or private bank up on maturity.

Now, that you have checked the returns earned from investing in PPF Accounts using the PPF Account calculator, it is very much important that you have a brief understanding of public provident fund and how does it work.

## What Is The Formula Used For PPF Account Calculator?

The interest on PPF account is calculated using a very simple formula. The formula can be expressed as follows:

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

where,

• ‘F’ stands for the maturity amount of the PPF
• ‘P’ stands for the annual instalments paid
• ‘n’ stands for the number of years or tenure of the PPF
• ‘i’ stands for the rate of interest.

It should be noted that the interest on PPF is compounded on a yearly basis. Instead of doing it manually which will take much of your time and energy, you can simple use moneycontain free PPF account Calculator and know result’s instantly.

## How Public Provident Fund Works?

PPF stands for Public Provident Fund, it was first introduced under Public Provident Fund Act, 1968 (23 of 1968), by the Central Government of India under Finance Ministry’s National Savings Institute.

on 1st July 1968 the PPF Scheme came in to effect, under these scheme any individual may, on his own behalf or on behalf of a minor of whom he is the guardian, subscribe to the Public Provident Fund (PPF).

Since then it has surfaced as one of the powerful source to create long-term wealth for investors. The government of India’s guarantee and unmatched tax benefits make a PPF account one of the safest, attractive and popular long-term investments available.

Although, due to the pandemic (Coronavirus) the rate of interest (ROI) on PPF has been reduced in the quarter March, FY20 to 7.1 and is currently for year 2024 (this quarter) is at 7.1% p.a.

May be in the upcoming quarter of FY24-25 you may see it again in range of 7.58% or above. Below are some of the important aspects of PPF account and how it works;

1. Minimum and Maximum Investment: An investor need to make a minimum investment of Rs. 500 annually. A maximum investment of Rs. 1.5 lakh can be made in one year in PPF account.
2. Very Low PPF Account Fee: You can open a PPF account with just Rs. 100 with any recognised, You can make deposits every month or in a lump sum through cash, cheque, DD or online transfer.
3. Taxation: PPF scheme comes under the Exempt-Exempt-Exempt (EEE) category of tax policy which means that the principal amount, the maturity amount, as well as the interest earned is exempt from taxes. Investments in the Public Provident Fund are subject to tax deduction benefits up to the cumulative limit of Rs. 1.5 lakhs u/s 80C of the Income Tax Act, 1961.
4. Loan against PPF: You can take a loan on your PPF account between the 3rd and 5th year and make partial withdrawals after the 7th year for emergencies.
5. Better Interest Rates: The interest rates are backed and guaranteed by Government of India, moreover ROI is usually higher than most of the other schemes such as FD of many banks and saving accounts.
6. Safe from government orders: The PPF account is immune from attachment from any order or decree of any court under the Government Savings Banks Act, 1873.
7. Minor Account Eligibility: Parents or guardians can also open PPF accounts for their minor children.
8. Extensions are Allowed: Investors can extend the tenure of their PPF investment beyond 15 years from the date of initial investment with a block of 5 years. One can do so with deposits or even without making any further contribution to the PPF account, the current rate of interest is 8% during extended period.

Apart from above benefits of a PPF scheme, another important factor which makes it worthwhile is the future security. For example, the balance in a PPF account cannot be attached to an investor’s liabilities in the event of insolvency.

### What Are The Drawbacks Of PPF Account?

Here are some of the primary drawbacks of public provident fund (PPF) scheme:

1. Lock-in period: A PPF account is a fixed-income, long term investment with a lock-in period of 15 years. Premature withdrawals are allowed but only in case of emergencies. This tenure can be extended by 5 years at the end of the actual lock-in period.
2. Maximum Investment Cap: You can’t make more than Rs. 1,50,000 yearly investment in a PPF scheme throughout tenure as of now. Having said that, in extension period the investment can be made more than Rs.1.5 lakh p.a.
3. NRIs are not eligible to open PPF accounts: However, a resident Indian who has become an NRI after opening an account can continue the account until maturity
4. No Joint/Multiple Accounts: Opening of joint accounts and multiple accounts are not allowed under PPF scheme.

Hence, the are very limited drawbacks for PPF scheme, which makes them one of the greatest investment option for long-term. There are no monthly compulsion to make deposits in ppf account, one can Just do it once in a year of not less than Rs.500.

### What Is Public Provident Fund In Post Office?

Public Provident Fund (PPF) account can be opened in any post office near you, it is just an option given to any investor seeking to invest money in PPF through different channels. One can even open the PPF Account in any government or private bank as well and there won’t be any difference in terms of returns or any other features.

There are many major private and government banks like SBI, PNB, Union bank, Central Bank, ICICI, Axis, IndusInd  HDFC, Kotak Mahindra bank Etc.

The above banks are not limited, there are many other small, medium, commercial, government banks which allows opening a PPF account.

If you have already account with any of them you can simple visit either the branch or log in to your net banking to open PPF account instantly.

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If you are existing users of these banks than you can even open an account online or else you can visit and fill in the PPF account form by submitting minimum Rs.100.

On opening an ppf account, the depositor shall be given a passbook bearing the date of opening of account, the number of his account, his name and address and the amount deposited and also the monthly interest payable along with the date on which the deposit will be due for final payment, it will be issued to you just like a bank passbook.

The deposits can be made by either visiting bank or online too. One can also opt for monthly, yearly, half yearly, deduction directly from the bank account.

### Post office monthly scheme (POMIS) Vs PPF Which Is Better?

Post Office Monthly Income Scheme POMIS is a government-promoted savings scheme offered by the Department of Post (DoP) or Indian Post. POMIS gives investors monthly returns in the form of interest payments.

At present post office monthly income scheme interest rate are at 7.4% From 01.04​.2024.

Usually the scheme’s interest rates are announced every quarter and is fixed and changed by the Central Government and Finance Ministry every quarter depending on the returns yielded by Government bonds of the same tenure.

Post office monthly income scheme popularly known as MIS (Monthly Income Scheme) offers individual common investors an opportunity to make a one time investment and get monthly fixed returns as an income. POMIS is best suitable for those investors who are seeking fixed monthly income.

On the other hand PPF is a saving cum investment and the return are little higher, moreover MIS plan doesn’t come under the Section 80C of the Income Tax and it is subject to taxation.

### Public Provident Fund (PPF) Vs National Pension Scheme (NPS) Which Is Better?

PPF is better than NPS when you talk about taxation benefits, however NPS have higher returns in comparison to PPF. Having said that the returns are not guaranteed in NPS as it is depend on market fluctuation .

There is no age limit for PPF whereas NPS does have a age limit.

PPF lock in period is 15 years, on the hand NPS is locked till you reach 60 years. Overall, if you are someone who is risk taker you can go with NPS otherwise stick with PPF.

### Public Provident Fund (PPF) Vs Fixed Deposits(FD) Which Is Better?

Fixed deposits are made for fixed time period which ranges anywhere between 7 days to 10 years usually. In comparison to an FD, PPF has a longer lock-in period of 15 years. Also, PPFs allow premature withdrawals only after the 5th year. Additionally, there is a withdrawal limit.

Investors can avail loan against their PPF investments from the third year. While in the case of an FD, the bank provides an overdraft facility up to 90% of the deposit amount.

Both PPF and FD investments can be claimed for tax deductions. Under section 80C of the Income Tax Act, investors can claim deduction up to INR 1,50,000 per annum.

For long term investments, PPF is much better with guaranteed returns. On the other hand, FD is suitable for investors looking at short term investments. The returns in FD may be less than PPF usually, also depends on banks.

### Is It Possible To Open a PPF Account Online?

Yes, there are many private and government banks allows you to open an PPF Account online. To open a PPF account online, you should have an account with the bank you are going to open your PPF account.

Having said that, every bank may have a different options available online under different section, but the core process remains the same.

Checkout the given steps below to open PPF account online:

• Click in the option that allows you to ‘Open a PPF Account’.
• Choose the relevant option between a ‘self account’ and a ‘minor account’.
• Enter the required information such as nominee details, bank details, etc.
• Verify details like your Permanent Account Number (PAN), etc. that is shown on the screen.
• After verifying the details, enter the amount that you wish to deposit in your PPF account.
• You will be asked to set up standing instructions that enable the bank to deduct the amount at fixed intervals or in a lumpsum.
• Once this verification is done, your PPF account gets opened. You are advised to save the account number that is displayed on the screen for future reference.

Do keep in mind that certain banks may even ask you to submit the hard copy of the details entered along with the reference number and submit it to the respective bank with your KYC details.

### Which Documents Are Required To Open A PPF Account?

Below are the documents required to open a PPF Account:

1. KYC documents to verify the identity of the individual- Aadhaar Card, Voter ID card, or Driving License
3. PAN Card
4. Passport-size photograph of the individual

### Is It Possible To Withdraw Money FromPPF Account Before Maturity?

Yes, You can  make partial withdrawals in advance from your PPF Account balance before maturity period of 15 years. However, partial withdrawals can be made in emergency cases such as medical or educational purpose of children.

As per the PPF Scheme, partial withdrawals from the account can be made after the completion of the 5th Financial year from the year in which the account is opened.

For example, if the account was opened on 5 January, 2015, withdrawal can be made from the financial year 2020-21 onwards. Also, keep in mind that only one partial withdrawal is allowed per financial year.

You need to submit the Form C for making partial withdrawal from the PPF account. You can get this easily from the bank or post office where your PPF account is opened.

The maximum amount that can be withdrawn per financial year is the lower of the following:

1. 50% of the account balance as at the end of the financial year, preceding the current year, or
2. 50% of the account balance as at the end of the 6th financial year, preceding the current year.

### Is There An Option To Close PPF Account Before Maturity?

No, Premature closure of PPF accounts is not permitted within 5 years of opening the account. In 2016, the Government amended the PPF scheme and propagated some positive changes regarding the withdrawal of balance from the account. You can now withdraw the whole amount and close your account after 5-years.

Having said that, it can only be closed on specific scenarios such as any life threatening ailments or diseases affecting the account holder, spouse, dependent children or parents or children higher education.

However, supporting medical documents have to be produced to support a claim on these grounds.

Also, note that their is a penalty levied in the form of a 1% reduction in the interest applicable for the period for which the account is held.

For example, if you have earned interest of 8% per annum for five years on the PPF account, the interest for each year will be reduced to 7%.

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## Conclusion:

One of the greatest advantage of PPF Scheme is the extension period allowed once the maturity period is over after 15 years. The PPF extension earns the interest rate even more than the maturity period and can be done in block period of 5 years with or without any further contributions made.

Moreover, the extension can be done as along as you want in period of 5 years, also the partial withdrawals are allowed during the same.

If you are someone who is looking for making a long term investment plan for you or your family than Public Provident Fund (PPF) schemes are best, without worrying about the ups and down of stock market related schemes, PPF is the best choice.

It’s backed by government and have assured returns which makes it even more secure.

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Note: Please do not take this as any recommendation, to trade or invest. This is just for reference, to make you understand more about PPF Account Calculator and its importance, under no circumstances intended to be used or considered as financial or investment advice, a recommendation or an offer to sell, or a solicitation of any offer to buy any securities or other form of financial asset.

Please do your own research and make investment. Moneycontain will not be responsible for any of your losses at all. The point made is for educational purpose only. All investments are subject to risks, which should be considered prior to making any investments.