PPF Balance Interest Rate Calculator | Best Way to Calculate PPF Balance - CRED
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how to calculate interest on ppf balance

how to calculate interest on ppf balance

the best part about ppf is the interest that one gets on ppf deposits and also gets tax exemption at the time of filing itr for the fiscal year.
finance
February 11, 2021
6 min read
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how to calculate interest on PPF balance

How to Calculate Interest on PPF Balance

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the public provident fund (ppf) is one of the best tax-saving schemes under section 80c of the income tax act, 1961. the objective of opening a ppf account is to develop a habit of saving among the people. the minimum amount one can deposit is ₹ 500, and the maximum is ₹ 1,50,000.  it comes with a 15 years lock-in period, but you are allowed to go for partial withdrawal from the 7th year. in special cases, the government of india allows premature closure as well.

know about the ppf interest rate and how it is being calculated

the maximum rate of interest applicable on the ppf deposit is 8% per annum. it means each year you will get an appreciation of the amount deposited by the way of compound interest.

they calculate the interest rate on ppf based on the minimum amount that starts from the 5th of each month and goes till the last date. in case any investor is planning to make a huge amount of deposit in the ppf, he or she should make a deposit before the 5th or on the 5th of the month.

mathematical formula to calculate ppf interest rate

the formula of ppf interest rate:

f = p[({(1+i) ^n}-1)/i]

in this,

f = ppf maturity proceeds

p = annual installments,

n = number of years,

i = rate of interest/100.

for instance, you are investing around ₹ 12,500, the interest rate applied on is 7.6 percent annually, which is constant for the present fiscal year. the total ppf interest credited in the account as per the formula would be around ₹ 5,858.33.

how the ppf calculator helps in calculating the ppf interest rate

it is a must for everyone who is investing money in ppf to learn to calculate the ppf interest rate using the ppf calculator. it is one of the best online financial tools that can help you to know about all the ppf related things like interest to be earned in 15 years, amount to be received till maturity date, and growth of your investments. it is a very user-friendly and accurate financial tool. any changes that take place in the ppf rate of interest along with the details of the month are also taken into consideration by the ppf calculator.

main components of the ppf calculator

ppf account tenure: the minimum tenure is 15 years, and the maximum is 50 years. it comes along with the option of extension with a 5 years block.

deposit/payment frequency: one can go for annually, half-yearly, monthly, or quarterly.

deposit amount: here the amount gets deposited according to the deposit frequency. if you have made a deposit of ₹ 1,000 and choose the ‘monthly’ frequency, the total ppf for that financial year will be ₹ 12,000.

ppf interest rate: it is the expected rate of return on the investment made in ppf during the fiscal year.

different types of ppf calculator

●       ppf fixed monthly investment calculator

●       ppf benefits calculator

●       ppf return calculator

●       ppf loan calculator

●       ppf withdrawal calculator

●       ppf maturity calculator

●       ppf fixed yearly investment calculator

the benefits of using the ppf calculator

there are several components in the ppf calculator like fixed annual contributions made, ppf interest rate of a particular year, age group, along with the total income of an individual.

●       annual tax-savings

●       makes you know the income tax liabilities before & after investing

●       total tax savings of 15 years

●       tax-free income

summary

overall, the ppf is considered as the wiseable saving-cum investment option. it is the most secure way to manage your wealth.