Public Provident Fund (PPF) is a popular long-term investment option in India, which offers tax benefits and assured returns. The interest rate on PPF is decided by the Government of India and it is revised every quarter. As of March 2023, the interest rate on PPF is 7.1% per annum. In this article, we will discuss how to calculate returns on Public Provident Fund using a PPF calculator.
What is a PPF Calculator?
PPF calculator is an online tool that helps investors to calculate the maturity value of their investment in PPF. It is a simple and user-friendly tool that can be used by anyone to calculate the returns on their investment. PPF calculator takes into account the investment amount, duration of investment, and interest rate to calculate the maturity value of the PPF investment.
How to use a PPF Calculator?
Using a PPF calculator is a simple process. Follow the steps mentioned below to calculate the returns on your PPF investment:
Step 1: Visit any online PPF calculator website.
Step 2: Enter the investment amount. The minimum investment amount is Rs. 500 and the maximum investment amount is Rs. 1.5 lakh in a financial year.
Step 3: Select the duration of investment. The lock-in period of PPF is 15 years. However, investors can extend the investment for another 5 years after the maturity of the PPF account.
Step 4: Enter the interest rate. The current interest rate on PPF is 7.1%.
Step 5: Click on the ‘calculate’ button to get the maturity value of your PPF investment.
For example, let’s assume that you invest Rs. 1.5 lakh in PPF for 15 years. The current interest rate on PPF is 7.1%. Using a PPF calculator, the maturity value of your investment will be Rs. 4,37,119.
Benefits of PPF Calculator
Long- term Investment
One of the biggest benefits of investing in a PPF account is that it’s a long- term investment. The minimal investment period for a PPF account is 15 times, and investors can continue to invest in the account for a outside of 30 times. This makes PPF an excellent investment option for individualities who are looking to make a long- term corpus for their unborn requirements.
The long- term investment period of PPF also makes it an excellent investment option for individualities who are looking to save for their withdrawal. By investing in a PPF account, individualities can make a substantial corpus over a period of time, which can be used to meet theirpost-retirement requirements.
Duty Benefits
Investing in a PPF account also provides investors with a number of duty benefits. The quantum invested in a PPF account is eligible for duty deductions under Section 80C of the Income Tax Act, over to a outside ofRs.1.5 lakh per time.
The interest earned on the PPF account is also duty-free, which means that investors don’t have to pay any duty on the interest earned on their investment. This makes PPF an excellent investment option for individualities who are looking to save on their levies while earning an seductive rate of interest on their investment.
Guaranteed Returns
Investing in a PPF account provides investors with a guaranteed rate of return. The current rate of interest on PPF accounts is7.1 per annum, which is compounded annually. This means that investors can earn a substantial quantum of interest on their investment over a period of time.
The guaranteed rate of return on PPF also makes it an excellent investment option for individualities who are threat- antipathetic. Since the investment is backed by the Government of India, investors can be assured that their investment is safe and secure.
Liquidity
Although the minimal investment period for a PPF account is 15 times, investors can make partial recessions from their account after the completion of the sixth time. Investors can withdraw up to 50 of the balance in their account at the end of the fourth time antedating the time in which the pullout is made.
This makes PPF an excellent investment option for individualities who are looking for a long- term investment but also need access to their finances in case of an exigency. The partial pullout installation also makes PPF an excellent investment option for individualities who are looking to save for their children’s education or marriage.
Inflexibility
Investing in a PPF account also provides investors with a lot of inflexibility. Investors can choose the quantum that they want to invest in their account each time, subject to a minimal investment ofRs. 500 per time. They can also choose the frequence of their investment, which can be yearly, daily, or annually.
Investors can also transfer their PPF account from one authorized bank or post office to another. This makes it easy for individualities to manage their PPF account and invest in it from anywhere in the country.
