The Public Provident Fund (PPF) was introduced by the National Savings Institute under the Ministry of Finance in 1968. Its main purpose is to provide the individual an option to build a retirement corpus with small savings having the fixed and guaranteed rate of return backed by the Government of India. So, do you want to calculate the amount you will have which can be difficult to calculate in a handy way. Here, a PPF calculator can solve your problem.
What is a PPF calculator?
A PPF calculator will help you to calculate the amount you will have after a certain period of time based on the yearly investment and the prevailing interest rate in the PPF account. It is good to invest in PPF who are risk averse and are looking for fixed returns with tax saving benefits. The amount invested, interest earned and maturity amount received are all tax-free under the Section 80c.
For example, suppose you want to start investing in your PPF account in which you want to invest ₹10,000 every year for continuous 25 years. The fields to be entered in the PPF calculator are
- Yearly Investment
The minimum yearly investment in PPF account is ₹500 and the maximum is ₹1,50,000.
In this field, fill the amount you want to invest every year which is ₹10,000.
- Time Period
The minimum time period is generally 15 years. In this field, fill the time period for which you are able to make your continuous investment which is 25 years in this case.
- Rate of Interest
This field will not change but is fixed to the current interest rate offered by the Government of India which is currently 7.1%.
The calculator returns the graphical representation that will show these three values.
- Invested Amount
₹2,50,000 is the total amount you have invested for continuous 25 years.
- Total Interest
₹4,37,201 is the total interest amount you have earned over and above the invested amount.
- Maturity Value
₹6,87,201 is the total lump sum value you will have in your PPF account.
Benefits of using the PPF calculator
- Available free to use
You must have paid various demat account charges in order to avail its services from the stockbroker but you can easily access the PPF calculator for free on the related websites.
- Investment Planning
Knowing the returns even before the investment is a good situation to be in, therefore PPF calculator will help you to calculate your total wealth in your retirement corpus. You can also save yourself from paying heavy taxes by investing in PPF.
- Flexibility
You can use the calculator by changing the input values to check at which point you will be able to earn your expected amount or you can save your taxes.
- Error-free results
Doing a calculation for the next 15 years or more can be complicated but you can easily calculate all the amount earned and interest earned using this calculator in a very easy way even if you don’t have any knowledge.
Conclusion
You always want to save on the small charges you paid every year such as Demat account charges, bank charges, etc. but you can save in yearly tax liabilities by investing in PPF and calculating the same with the use of PPF calculator.