PPF Calculator
Yearly Investment
Time Period
Rate of Interest
How is PPF Interest Calculated? Here is Everything You Must Know

As per the Public Provident Fund (PPF) rules, the interest on the PPF balance is calculated monthly and is credited to an individual's account at the end of the financial year on 31st March. However, the interest calculation follows the annual compounding method. Isn’t it a bit confusing?
Well, not anymore! Read the following section to get a clear understanding of the PPF interest rate, its calculation process, and everything related to it.
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PPF Calculator - An Online Financial Tool

PPF Calculator - An Online Financial Tool
As stated earlier, the PPF calculation process slightly differs from other savings or investment options and is complicated as well. In such cases, the PPF calculator acts as one of the best ways to calculate PPF interest easily.
PPF calculator is an online tool that helps you to calculate the year-wise return against your contribution to the PPF account for a fixed tenure with a specific frequency. In short, if you are willing to invest in PPF but not sure about the ideal amount of investment or the return it would generate for investing for a certain period, you can use the PPF calculator to get fast results/calculations.
This versatile tool eliminates the need for different bank-wise calculators, such as HDFC PPF calculator, SBI PPF calculator, etc.
Introduced in 1968 by the Finance Ministry’s National Savings Institute, Public Provident Fund (PPF) is one of the most sought long-term savings cum investment products. One of the reasons that makes PPF a popular choice is the substantial return, i.e., the accumulated interest amount at the end of every year it guarantees.
How PPF Interest is Calculated?

How PPF Interest is Calculated?
Those who are wondering how the PPF interest is calculated must know that the PPF interest is calculated on the minimum PPF account balance of an individual deposited between the 5th and the last day of every month. With this comes several facts to consider. Such as -
- If you are willing to make a fresh deposit, you need to get it done before the 5th of each month to get interest on that deposit for that month. In cases otherwise, the interest will be calculated on the previous balance, and the new deposit will not be considered.
- Therefore, to increase the interest, individuals need to deposit contributions or lump sum amounts prior 5th of each month.
- PPF subscribers can deposit a minimum amount of ₹500 in the PPF account, and the upper limit goes as far as ₹1.5 lakhs.
- Note: The deposit in a PPF account in a lump sum can be made in a maximum of 12 installments each year.
- Therefore, if you have the maximum limit of the PPF account, you should deposit it by 5th April. It will facilitate you to generate interest in the one-time deposit for the whole year. An example will further help you to understand this clearly.
For instance, in the previous financial year, you had a balance of ₹1 lakh in your PPF account. You deposited ₹50000 before 5th April. Therefore, the minimum/lowest monthly balance (from 5th April to 30th April) is ₹150000. Hence, you will get an interest of, let’s say, X (higher) for that month (depending on the PPF interest rate).
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PPF Interest Calculation Formula
The PPF interest calculation method includes the compound interest calculation formula and the compounding of the PPF principal amount annually, i.e., each year.
Here’s the formula for calculating PPF interest.
A=P(1+r)˄t
Where,
- A - PPF maturity amount
- P - PPF principal amount (invested)
- r - PPF interest rate
- t - Time period
One thing can be speculated from the above-mentioned formula: the longer the investment period, the higher the interest you can generate on the PPF account. Now that you know how interest is calculated on PPF, you should assess how rates change over time.
PPF Interest Rate and its changing/revising Frequency
Public Provident Fund generates an amount of interest on the PPF balance/principal. The current PPF interest rate is 8.15% for the Q3 of the financial year 2023-24. The rate is determined by the Government of India, which remains constant no matter where the PPF account is opened.
The amount is compounded annually, which means PPF subscribers can avail a substantial amount every year in the form of compound interest.
In the previous year, the PPF interest rates fluctuated and witnessed a sharp decline since 2016. Moreover, the payable PPF interest rate is decided yearly according to the requirement.
However, from 2017 onwards, the interest rate has changed and is notified quarterly.
How PPF Calculator Works?
As stated earlier, the PPF interest calculator is an online financial tool that offers hassle-free calculation of PPF interest earned on the investment and maturity amount after the lock-in period of 15 years. If you can’t understand how to calculate the PPF interest rate, using this tool is the best option.
To use the PPF interest rate calculator, you need to select the type of deposit (fixed amount or variable) and the deposited amount for each year.
To be precise, you need to put data like PPF interest rate, time, and invested principal amount, and it will show you the results.
However, the results will show a table with some new terms, which you must know to understand the results better.
Important Facts about PPF Account
- PPF schemes come with a lock-in period of 15 years.
- These accounts can be extended for blocks of five years.
- The government facilitates the premature closure of the PPF account after five years under special circumstances.
The above-mentioned segments contain all the necessary information regarding the PPF interest rate. Now that you know how the PPF interest rate is calculated, and the tax benefits on PPF interest, depositing/investing in this savings cum investment instrument will be easier and hassle-free.
So, start looking for the highest PPF interest rate today!
How PPF Interest Rates have changed over the last 3 years?
The table below shows the changes in the PPF rate of interest over the last 3 years:
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