PPF Calculator
What is a PPF calculator?
Public Provident Fund (PPF) scheme is a popular long term investment option backed by Government of India which offers safety with attractive interest rate and returns that are fully exempted from Tax. Bank of Baroda operates Public Provident Fund account schemes across its branches all over India. Use a PPF calculator to know more and open a public provident fund account.
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 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.
How to Calculate PPF?
An individual can easily calculate his/her PPF interest and thus, the maturity amount for a particular tenure with the help of the online PPF calculators. A number of Public Provident Fund calculators are available online and can be used for this purpose. They are free of cost and very easy to use.
The interest on PPF is calculated using a very simple formula. The formula can be expressed as follows:
F = P[{(1+i)n-1}/i]
where,
- ‘F’ stands for the maturity amount of the PPF
- ‘P’ stands for the annual instalments paid
- ‘n’ stands for the number of years or tenure of the PPF
- ‘i’ stands for the rate of interest.
However, in case you use a PPF calculator to calculate the same, you can feed the details in respect to the investment amount and tenure of the PPF and know the estimated amount very easily. It should be noted that the interest on PPF is compounded on a yearly basis.
Apart from the PPF calculator being an easy tool to use, it also provides accurate details. There are various PPF calculators available online. Depending on the PPF interest rate for the financial year, calculations are made. Given below is an example of how the PPF calculator works.
PPF Benefits Calculator
This PPF Calculator involves various elements that include a fixed annual contribution, interest rate in that year, age group of the individual. Total income of the individual. Then for the main benefits, the following has is displayed:
- Tax-free income
- Income Tax liability before investment
- Income Tax liability after investment
- Annual tax savings and,
- Total tax saving in 15 years
Can I make monthly deposits in my PPF account?
Second, you don’t need to invest it all in one shot; you can invest into your PPF the same way you would invest by way of a Systematic Investment Plan (SIP), i.e. by making up to 12 instalments in a year of different amounts, but not more than 12 investments in a year.
What if I forget to deposit money in my PPF account for one year?
Your account is considered de-activated. To re-activate your account, you need to pay a fine of Rs 50 for each year that you have not made any subscription, and also make a minimum subscription of Rs 500 for each year that you have missed. Then your account will be reactivated, and you will re-start earning interest.
The account will only be closed after maturity and will continue to earn interest till it is closed. The facility of loan or withdrawal will not be allowed from such account.
However, the account can be regularized by remitting a penalty of Rs 50 per financial year and this should be credited to the Government of India / Reserve Bank of India.