How it's calculated
The Public Provident Fund pays interest set by the Government every quarter: 7.1% a year for October to December 2026.Department of Economic Affairs Under the PPF Scheme, 2019, interest is worked out for each month on the lowest balance between the close of the 5th and the end of the month, and added to the account once a year at the end of the financial year, so it compounds yearly.India Post
That makes timing matter: a deposit made by 5 April earns interest for all 12 months, while one made on 6 April earns for 11. The calculator models a yearly deposit made by 5 April, or equal monthly deposits made by the 5th of each month.
The formula
Yearly deposits (by 5 April): each year, interest = (balance + deposit) × rate, and the new balance = balance + deposit + interest. Over n years this is D × ((1 + r)n − 1) ÷ r × (1 + r).
Monthly deposits (by the 5th): each month's interest = balance after that month's deposit × rate ÷ 12; the 12 months' interest is added at year end.
Deposits are between ₹500 and ₹1,50,000 a year. The account matures after 15 full financial years from the end of the year it was opened, and can be extended in blocks of 5 years.
Worked example
Depositing ₹1.5 lakh by 5 April every year for 15 years at 7.1% builds ₹40,68,208, of which ₹18,18,208 is interest.
| Line | Amount |
|---|---|
| Deposits (₹1,50,000 a year) | ₹22,50,000 |
| Interest earned | ₹18,18,208 |
| Maturity value | ₹40,68,208 |
Paying the same amount as ₹12,500 a month gives ₹39,44,600, because each instalment earns interest only from its month. Extending the account with deposits for two more 5-year blocks, to 25 years, grows it to ₹1,03,08,012.
Assumptions and limitations
- The current rate for every year. The rate is reviewed every quarter and has changed in the past.
- Interest is rounded to the rupee each year in the schedule.
- No loans or withdrawals. The scheme allows loans and partial withdrawals after the first few years; both reduce the final amount.
- Tax: under the old regime deposits count towards the ₹1.5 lakh 80C limit; the interest and maturity amount are not taxed.