It is now easier than ever to calculate public provident fund investment returns and the maturity amount with an online PPF calculator. Read on to understand the benefits of PPF and the way in which it assists in saving taxes. PPF or Public Provident Fund in India was introduced in the year 1968 with a goal to mobilize smaller savings in the form of an investment, with returns on it. To date, it remains an avenue for several investors as these returns are exempt from tax. PPF can therefore be referred to as a vehicle that helps make smaller savings and save on taxes. If you are looking for a secure investment option that also helps you save taxes with guaranteed returns, opening a PPF account will be a smart choice. Let us now understand how a PPF calculator works. 

What is a PPF Calculator?

Handling calculations is not a piece of cake. So, if you are looking to invest in the Public Provident Fund and you are not sure of how much to invest or the returns you may get on investing a certain amount, a PPF calculator assists in simpler calculations. Once you have decided on the amount you can afford to invest regularly, a PPF calculator considers the tenure to be 15 years and the prevalent interest rate that helps get an estimate of returns. 

How to Use the PPF Calculator?

A PPF calculator has a user-friendly and self-explanatory interface. However, if you are new to using a PPF calculator, here is a simple guide to make the right use of a PPF calculator:

  • Step 1: Under the field, ‘frequency of investment’, there will be a drop-down menu. Click on this drop-down menu to find options such as yearly, half-yearly, quarterly, and monthly. Based on the frequency of deposits that you can make in the PPF account within a particular financial year, choose an option from the drop-down menu. 
  • Step 2: Under the label ‘yearly deposit amount’, enter the amount of money you are planning to deposit in the PPF account over the span of a financial year. It is also important to note that the maximum amount you can deposit in the PPF account is INR 1.5 lakhs in a financial year. 
  • Step 3: The current rate of interest is provided by default for your data. 
  • Step 4: Choose the number of years you wish to remain invested in the PPF account. The choice by default here is 15 years as this is the minimum investment period. The numeric value for selection will be present on the right. 
  • Step 5: A PPF calculator automatically calculates the maturity value from a PPF account based on the values provided and the applicable rate of interest. This makes a PPF calculator, one of the best and easy to use return on investment calculator in India. 

How is a PPF Calculator Helpful?

A PPF calculator as a return on investment calculator India, can be extremely helpful if you are planning an investment because: 

  • A PPF calculator resolves several questions based on the working of an account
  • You can also get a clear picture of the expected returns that can be generated by investing a certain amount
  • A PPF calculator can also be reused until there is a balance between the amount which you must invest to get the desired returns
  • A PPF calculator can also be used at the tax-planning stage for better planned investments
  • Since the option for extension of a PPF account over the lock-in period exists, you can also get an idea as to the amount of time you have until retirement and to what extent you can grow your wealth till then. The PPF interest rate is compounded on an annual basis.

When it comes to PPF investments, the risk factor associated is low as it is government-backed. A PPF account can be easily opened at selective private banks, post offices, public and nationalized banks with a great reach. Even though there is a lock-in period for 15 years in the case of PPF, there are special provisions wherein money can be withdrawn, and you can also take loans after a span of 7 years. Also, the returns from PPF are more attractive as compared to fixed deposits and can be calculated with the help of a PPF calculator. In addition to this, PPF deposits fall under the exempt-exempt-exempt category which means it is tax exempt.