Public Provident Fund (PPF) calculators can help you determine the value of your investment over a specific time period. PPF is a government-backed savings program that offers many benefits. A PPF is a great way to reduce your tax burden while you are employed. It has a 15-year lock-in period and offers higher returns than other investments such as fixed deposits.
It is important to note that an online PPF calculator normally uses the PPF calculation formula to determine the final value of your investment after a certain amount of time has passed and after a certain interest rate has been applied to the PPF account.
We might not all be good at doing calculations. If you intend to invest in a PPF but don’t know how much to invest or what return you might achieve, the Vakilsearch PPF calculator is the perfect tool to use. Once you decide how much you are willing to spend regularly, the calculator calculates returns based on a 15-year tenure and the current interest rate.
What Is a PPF?
Public Provident Funds (PPF) were first introduced in India in 1968, and they collect small contributions in order to turn them into investments with a higher return. This method continues to be a preferred method of saving for many investors since the earnings are tax-free. It is also known as an investment vehicle that lowers one’s yearly taxes while allowing one to save for retirement. If you are looking for a safe investment option, it is best to open up a PPF account to gain guaranteed profits and also save taxes.
PPF Interest Calculation Process
PPF Calculators use the formula below to calculate the required amount.
The formula for A is P + (1+R)
The maturity amount of a PPF is indicated by ‘A’
You can choose from monthly, quarterly, half-yearly, or annual payments
It is your PPF’s major investment that is denoted by the letter ‘P’
The government announces a certain interest rate, ‘r’
PPF accounts are kept for a period of time called ‘t’.
How Can the PPF Calculator Help You?
- The Vakilsearch online PPF calculator can assist you in determining the project returns as you make investment plans.
- A clear picture of the expected return on investment can be seen
- Using the calculator repeatedly will help you achieve your desired returns until you find the right amount to invest
- Automating this avoids errors and eliminates manual calculations
- Calculators can be used during the tax planning process to assist in investment planning
- In the case of extending your PPF account beyond the lock-in period, you may be able to estimate how long it will take you to retire and how much wealth you can accumulate.
Benefits of the PPF Calculator
- PPF investments are low risk since they are backed by the government’s Nationalised
- A PPF account can be opened in any of the following locations: nationalized banks, public banks, and post offices
- PPFs do have a lock-in period of 15 years, but you have an option to obtain a loan or withdraw some of your money at the end of 7 years, which is more appealing when compared to bank FDs since the returns are higher
- The PPF is classified as an EEE deposit, so all investments, interest, and cash at maturity are tax-free. Deposits made to a spouse’s or child’s PPF account can also be tax-free.
Know More: Rate of Return on PPF
Who Can Open a PPF Account?
- India residents aged 18 and over can open a PPF account
- Each individual may only have one account
- PPF accounts can be opened for minor children by their parents
- A PPF account already opened by a non-Indian citizen cannot be opened by a non-Indian. However, NRIs (non-resident Indians) who previously had PPF accounts can keep them open until the lock-in period is over.
- PPF accounts opened by a Hindu Undivided Family (HUF) cannot be renewed. However, it may make contributions to the PPF account it established before 13 May 2005. The maturity term may not be extended.