What is a PPF Calculator? is a financial tool

A Public Provident Fund or PPF calculator is a financial tool that makes the task of computing the returns on investment quick and easy. The tool has an inbuilt formula that helps automate the calculation process and allows users to determine the maturity value of their Public Provident Fund account. 

Notably, the PPF calculator uses key details such as the investment amount, tenure, and interest rate to determine the maturity value. With the information received, individuals tend to readjust their investment approach or plan for better outcomes. 

Read along to find out more about the PPF calculator and how it helps to plan investment in the scheme better

PPF Calculator and its Usage in Brief

A PPF calculator is designed to help users find out how much money they should park in the Public Provident Fund scheme to generate enough funds to meet their goals. 

Calculating the maturity amount in advance helps users determine if remaining invested in the scheme would generate enough funds to meet their long-term goals. 

Such insight proves valuable in realigning their financial approach with their financial goals. A PPF calculator also offers an idea of how lucrative the prevailing rate of interest is. It helps to track the growth of capital throughout the investment period. This helps users understand whether the Public Provident Fund scheme is more lucrative compared to other investment options. In other words, such an investment calculator offers a fair understanding of how the different variables of the scheme work to boost capital. 

One should note that the interest rate offered on Public Provident Funds changes frequently. However, tracking this change could be a hassle if one is not aware of how to track it. Thanks to the PPF calculator individuals can easily find the prevailing rate of interest as most leading tools auto-feed the information every time an individual uses it. 

This frees the user from the need to track changes in the rate of interest and also helps make accurate calculations by entering correct interest rates, especially when the user is unsure of the same or is not aware of the latest rate. 

Public Provident Fund Formula

The system of PPF calculators has an inbuilt formula that automates the process of computing the maturity amount, making the process quick and less cumbersome. 

The investment tool uses the formula below to ascertain the returns on the Public Provident Fund scheme. 

F = P [({(1+i) ^n}-1)/i]


I = the interest rate 

F = the maturity amount

N = the tenure or investment period

P = the annual investment amount

Example of PPF Calculation

Check out the example below to gain an understanding of how to compute PPF returns using the formula. 

Suppose Suresh wants to invest Rs. 2,00,000 in a Public Provident Fund account annually for 15 years. The PPF account will yield returns at 7% per annum. So based on the formula the maturity amount will be – 

F = P [({(1+i) ^n}-1)/i]

   = 2,00,000 [({(1+7) ^15}-1)/7]

   = 5763698

By the end of the 15-year tenure, Suresh will receive Rs. 5763698 as the maturity amount from his PPF account. 

Computing the maturity amount using the PPF formula involves a lot of steps and complex variables. This makes the process cumbersome and prone to errors, which can affect the accuracy of the results. 

Needless to say, such mistakes will also jeopardize financial planning. 

This is where an online PPF calculator comes in handy. It not only eliminates the need for manual calculation but also makes the process quick and accurate. 

How to Use an Online PPF Calculator?

A PPF calculator is designed keeping in mind the ease of users, hence, it comes with a simple interface and user-friendly features. The financial tool doesn’t require individuals to process knowledge about the PPF formula or prevailing interest rate. Individuals can use the tool to compute their returns on a Public Provident Fund scheme by simply entering their investment details into designated fields. 

For instance, individuals are required to enter factors such as principal investment amount, frequency of investment, and tenure to find the maturity amount. Once all the required information is provided to the PPF calculator, it will display the maturity amount within a few seconds. 

Here’s a step-by-step guide about how to use a PPF calculator –

Step 1: Open an online PPF calculator

Step 2: Enter the principal deposit amount

Step 3: Enter investment tenure

Step 4: Cross-check/enter the interest rate

Subsequently, the maturity amount will appear on the screen. If the results do not match your expectation, you can readjust the combination of tenure and principal amount. Since the readjustments can be made for free, users can make multiple changes to the variables until they find desired results. However, users cannot use this calculator to compute the returns on other investment options like a Unit Linked Insurance Plan or fixed deposit schemes.

Perks of Using a PPF Calculator

Using a PPF calculator accompanies several benefits, all of which help users plan their investments better and aid in making an informed decision. 

Here are a few of such useful benefits –

  • Helps estimate the amount of money they would receive from the PPF account at the end of investment tenure m
  • Helps determine how interest will a PPF account accrue when compared to other investment options. 
  • Allows users to determine an ideal combination of tenure and investment amount to generate desired returns. 
  • Helps avoid errors that plague manual PPF calculation. 
  • Saves time and facilitates better comparison.

While users can benefit in these ways to make an informed decision, it is crucial to identify one’s financial standing too. In other words, a PPF calculator helps determine the annual contribution that would be required to build a robust corpus. However, individuals should identify their financial standing to know whether such an amount would suit their budget and won’t affect their finances. 

Subsequently, individuals should know more about the PPF scheme, its features, benefits, and limitations in detail to make an informed decision. Having a clear idea of these aspects will help develop a better investment approach for higher returns.