How PPF interest is Calculated (With Calculator)

There is a great confusion among investors on how PPF interest is calculated ? Just because a lot of investors don’t know this , they have questions like “what is the best time to invest in PPF to get maximum interest” or “Should they invest in lump sum or monthly?” . Once you know the procedure and exact ppf interest calculation method, life will be easy. Let me explain with examples how its done and also give you a ppf interest calculator in a excel sheet format at the end.

To explain in one line – “PPF interest is calculated monthly on the lowest balance between the end of the 5th day and last day of month, however the total interest in the year is added back to PPF only at the year-end” 

Excerpts from Official PPF page

8. Interest – Interest at the rate , notified by the Central Government in official gazette from time to time, shall be allowed for calendar month on the lowest balance at credit of an account between the close of the fifth day and the end of the month and shall be credited to the account at the end of each year

What this means is that the interest is not compounded monthly ! . While there is no ppf interest calculation formula, but the way its calculated is very simple ! . The interest earned in a year will added back to final amount only at the end of the year. Thats the only catch ! .

So lets see 3 different kind of cases where money is invested in PPF differently and see how the interest is calculated and added back to PPF account at the end of the year. We will see these 3 cases

Case 1 : Rs 60,000 deposited once on 1st Apr

Case 2 : Rs 5,000 deposited before 5th of every month

Case 3 : Case 3 : Rs 5,000 deposited after 5th of every month

The following examples give all the 3 cases examples assuming investment of Rs 60,000  in a year , but invested differently. I have taken interest at 8.6% per annum . Recently the PPF interest rate was increased to 8.6% and the limit was raised to Rs 1,00,000 and its now applicable from Dec 1, 2011 . So if you have  invested Rs 70,000 earlier in this year , you can still invest Rs 30,000 more in your PPF account.

PPF interest calculator

Note : Interest assumed is 8.6% for all the 12 months. However in reality it might happen that it may change in between for some months due to changes from govt.

Some Important Points on PPF Interest Calculation

  • If you are investing in PPF on monthly or several times a year, before 5th or after 5th will not matter a lot , it would be just few hundred rupees.
  • If you are investing your money in lump sum on yearly basis, it would be better if you can invest before the 5th of April, this will make sure that you earn interest on more balance for the month of Apr.
  • The interest on a particular month depends on the interest rate applicable for that month, if PPF interest rates change in between , then there might be different rate applicable from a point onwards.

Download PPF Interest Calculator Here

527 CommentsAdd Comment

  1. Rakesh Kumar

    Hi Manish,

    Thanks for the info.
    PPF calculator is very useful.
    Now we don’t have to wait for PPF statement to know the total amount. :)
    Even the online service to check the amt. gives 1-2 yr old data.

    Thanks,
    Rakesh

  2. hari

    Hi,

    Fantastic article.I have been searching for such a article for a long time.Good job

    Now I am very interested in how interest for EPF(employee providend fund is calculated).

    Can you add to this article or maybe update the excel sheet?

    -Hari

      • Pawan

        Hi Manish,

        Can you explain how is it compounded at end of the year? your interest doesn’t get added to your principal and you don’t get interest on the (principal+interest).

        Take case I from your example. You always get 430 which is nothing but interest calculated per annum / 12 . How is it compounded then ?

        Thanks
        Pawan.

  3. Mani

    Hi Manish,

    As usual, very informative article and in fact for me it was a timely sent article. I just thought of searching as to ‘how PPF calculator works’, but now that purpose has solved.

    Thanks once again for this useful article…

    Rgds,

  4. Deivasigamani

    Informative one. Its the same way for the EPF calculation as well. The interest is not compounded monthly. It just adds only after the year.

      • Deivasigamani

        I am not having any evidence from any of the EPF sites. But I figured it out using calculations with the help of excel.

        Initially on seeing the PF statements nothing made sense..So I decided to spent sometime and with googling / excel sheet figured this out. In the end, I made a excel calculator for just putting the PF amount getting deducted and the balance every year. As others know, i came to know about this

        * Interest is calculated on monthly running balance of PF
        * There is no interest on interest. Interest is added to PF balance every year

        Excel (or spreadsheet) should be the best software I had used. I didn’t accept this when professors used to tell this but now i accept it 😀

  5. Loved the crisp note.

    Here is the summary for all scenarios in the excel:
    Balance on Mar 31st = 50k
    Scenario 1: Contribute 60000 on Apr 1
    Interest = 9460
    Year end balance = 50k+60K+9460 = 119460

    Scenario 2: Contribute 5000 by 5th of every month
    Interest = 7095
    Year end balance = 50k+60K+7095 = 117095

    Scenario 3: Contribute 5000 after 5th of every month
    Interest = 6665
    Year end balance = 50k+60K+6665 = 116665

  6. daksh

    @manish interest is currently 8% its 8.6% only after april
    ty for sharing ur knowledge

    also request u to pls enlight me for interest on FD and interest on bonds
    i.e. its calculation for certain period say 3years nd difference in return if i considered tax slab of 10%
    thanks in advance

  7. Sharat Trehan

    Excellent, just what was needed. My only query is how to fill in the Excel worksheet when there are 2 deposits in a month – one till 5th and the other after 5th of the month. I guess the one after 5th can possibly be taken in as before 5th of the next month but this may skew up the PPF balance when the deposit of say 20th March of a financial year is taken in before 5th of April of the next financial year. Any suggestions?

    • Sharat

      Actually thats a very rare thing to hear that someone depositing 2 times in a month :) . so the calculator does not accomodate that scenario.. however there is not much to worry .. because even if you invest two times, just add both the amount and choose the “date” which was for the first payment , that will give the correct answer .

      Manish

        • Rohit Verma

          Piyush,

          I believe that’s not true. I keep on transferring funds from my SBI account to my ppf account. Sometimes i make a transfer 3-4 times in a month.

          • Sushil

            Sir
            As per PPF Rules, you can eposit any amount in PPF any number of times subject to maximum 12 times in a year….you may deposit monthly or even more than once in a month…but limit is total 12 deposits in a year

      • Sharat Trehan

        Manish, what I have done is create another worksheet with two columns for deposits, one where deposit is till 5th and another where the deposit is after 5th, the interest for the month being calculated on the sum of the opening balance for the month and the amount deposited till the 5th of the month. In a way it serves the purpose. I would like to thank you for showing the way forward, frankly I had no idea how the interest was being calculated on PPF, I simply took what was being credited to my PPF account. Thanks once again. I understand your point that not many people deposit PPF twice in a month but then the fun is in challenging the extra-ordinary and foreseeing a situation.

      • Ravi Anand

        Dear Manish!
        Need help with PPF interest calculation

        I opened PPF account on 22/03/2012

        1st deposit 500 (22/03/2012)
        2nd deposit 500 (31/03/2012)

        3rd deposit 70000 (04/04/12–new financial year)
        4th deposit 30000 (05/04/2012–new financial year)

        1. Do I get interest for previous financial year (2011-2012) for two 500/- deposits. It is not reflected in passbook. Will it be reflected at the end financial year (2012-2013).

        2. For financial year (2012-2013) I now invested full 100000 in two deposits on 4th and 5th April. How will be the interest calculated. Will it be on the 70,000 or 30,000.

        3. I wanted to invest single lump sum 100000 as a single deposit, but due to confusion on bank holidays I ended up making two deposits, through online 70,000 and remaining 30, 000 on the 5th by cash (unexpected). Did i erred in making the second deposit. Will it affect my overall interest at the end of the year. Please help.

        4. Balance on passbook stands as 101000 as of 05/04/2012.

        Thanks

        • Ravi

          For march month , the minimum balance for 5th-31st was 0 , because you deposited the money on 22’d , so no interest for March ,, now for April . you will get the interest on whole 1,00,000 as your balance was 1,00000 on 5th .

          Dont worry .. its not going to effect you

          Manish

          • Ravi Anand

            Dear Manish,

            Thanks for your prompt reply. I hope the others will also benefit from my example.

            Once again thanks a lot!!!

            • Ravi Anand

              Dear Manish,

              I have a question regarding opening PPF account in my wife’s name and tax treatment of the same.

              Can I contribute One Lakh in her PPF from my own salary since she is not working apart from my my own investment of One Lakh in my PPF, i.e., Two Lakh in total.

              Is it allowed to invest more than One lakh OR it has to be maximum One Lakh (clubbed).

              Thanks

  8. Parameswari

    Hi

    Good one. Can you also pl post an article highlighting the other features of PPF such as implications of withdrawing after 15/20/25 years or whether one can withdraw after 18 regular years of investments? Thanks

  9. Upendra

    Hello Manish,
    Can you correct me if I am wrong…
    If I deposit 5000 on April 3 then at the end of the month I am going to get 36 as interest amount. Now the total amount at the end of the month is 5036. If I’m not going to deposit any amount for the month of May then Interest should be calculated on 5036 and not on 5000……am I right?

  10. Ashish

    Perfect, this article has been published in right time since may people invest in PPF for tax saving purpose. I was under impression to invest monthly but looking at this 3 cases the best bet is to invest lump sum before 1st April to avail max. benefits. Many Thanks Manish as always :)

  11. sonal panchal

    Hi, Manish,

    Thanks a lot for this good info. I usually follow the second option in which i deposit lumpsum at the end of the year. and you showed there is such a big difference in the interest amount.

    Great going.

    Regards….

  12. Rakesh

    Manish,

    Excellent post, liked the use of examples. I usually invest lumpsum in the first week of April. Usually there are lot of holidays in 1st week of April so the bank is always crowded and the cheque gets cleared after 5th only.

    Rakesh

  13. Surya

    Correct me…if i’m wrong…

    If i invest 1lakh on april(2012), my total interest is calculate on next march(2013). In between government may change interest rate (if government needs money…it may increase interest..to raise funds…vice versa) , currently increased to 8.6%. So i’m investing money(at april) without knowing the interest (at march). If government proposed less interest rate before march, my calculation at april is wrong.

    But still i love ppf….

    • Surya

      No , you are wrong .. did you go through the whole article ? If you invest in April 2012 , you will get interest on that amount in April , then may , June … etc etc .. because interest is calculated on monthly basis .. Then that total interest is added back to PPF .. So you dont loose much ..

      Manish

      • Surya

        Yes i got it. If u don’t reply, i’ll be in false assumption. Thanks.

        So finally:
        Recently government increased interest from 8% to 8.6% from december2011. So interest is calcuated, from april-november (8%) and december-march(8.6%). I don’t know, why i’m missed this simple logic.

  14. Nitin sharma

    Thanks Manish.

    Again Bang on with the explanation and example !!!
    No more nail biting now on how much interest to expect by investing in certain way.

    Your article and your follow-up to most of the comments is commendable.

  15. Great idea and useful for common man to calucaulate their annual earning of investment in PPF account. But if you include another table which is helpful to calculate interest year after year for a certain amountof deposit every year.

  16. Bhargav

    Hi Manish,

    A nice article explained with simple examples. It would be of great help if you could explain the partial withdrawal rules associated with PPF (with examples of course!).

    Regards
    Bhargav

      • Bhargav

        The below is from one article which I found:

        “Premature withdrawal from PPF

        The entire amount in your account could be withdrawn only on maturity. However, in times of financial crises partial withdrawals are permitted subject to certain ceiling limits. You could withdraw once a year, from the 7th year onwards. Such withdrawals, must not exceed, 50% of the balance at the end of the fourth year, or 50% of the balance at the end of the immediate preceding year, whichever is lower.”

        As per this, if there is no withdrawal made for example at the end of the 10th year, then I would be eligible to get a maximum of 50% of the amount at the end of the 4th year.

  17. Venki

    For those who wants to invest in PPF yearly, it would be better to start an RD and get the benefits of RD interest as well. But on the other side, your monthly money will be locked (liquidity) in the RD. For those who wants not to miss the yearly deposits in PPF to get benefits of early investments (as suggested by Manish’s book), RD will be ideal option. Now you can open e-RD A/C online. If you deposit 8333/- per month in an RD with 8.25%, it will yield 4,468.57/- as interest amount, along with 99,996/- principal at the term end.

  18. Nitin Gupta

    Hi Manish,

    You mentioned that the interest for entire year is added at the end only.
    i remember in jan 2012 i went to sbi and got pass book printed.
    there i see some entry of interest also in the middle of the year.
    It is confusing me now…

    • Nitin

      that might be the entry for the PPF interest for that month, the entry might be done , but for the calculation of interest for next months , they will consider only the additions done from your side , not the interest part . That will be added back only at the end of the year

  19. sekhar

    Dear manish,

    from my childhood onwards. My father has never discussed about money issues with me. And he felt that i am just an MBA student and i don’t know anything about money issues than him. But today i explained him how ppf work.

  20. sekhar

    Then he appreciated me and discussed with me about one issue which he has been facing now with one bank and i solved that. Now he giving importance to my word. Thank you very much.

    Thanks,
    Sekhar

  21. Sandeep Sudhakaran

    explained in a simplified manner with easy examples..great work!…now i think that i gained some insight into the working of SI and CI..Thanks for helping all your avid followers including me :)

    • praveen

      Krantivir Rajput, That is what my parents do. Invest full amount between april 1st and 5th of every year. Manish, please confirm if this gives full benefit of ppf? thanks…great article.

      Also can PPF be transferred to a different person? thanks

        • praveen

          Manish, may be I was not clear on my question.

          Which one will give best returns.

          For 2011, if I deposit full amount in March 2012?
          or
          For 2011, if I would have deposited full amount in April 2011? so basically my question is can we hold till end of year (March of every year) to deposit and get full benefits?

          thanks,

          • KRANTIVIR RAJPUT

            @PRAVEEN. To get full benefit of PPF you need to invest full 1LAKH between 1-4 APRIL, hence at the start of the each new financial year. In your question to get benefit for 2011…invest between 1-4 APRIL 2011. Similarly to get benefit for 2012…invest between 1-4 APRIL 2012.

  22. Vikas

    Many thanks for the wonderful article, cud u pl advise Manish if one has to book a FD at rates for 5 years or more at 9.25% , is at highest trax bracket Vs PPF , is that advisable ?

    • Vikas

      PPF will lock your money for much higher period , but the tax will not be there .. so see if you are fine with the lock in , if yes , then go for PPF , else put money in FD

      Manish

        • James

          NO , thats not happening ! .. First PPF interest will not be taxable in DTC , that was proposed when DTC draft came for the first time, now in the second draft , that point is removed and PPF taxability will be same as of now . no tax at all .

          Next point .. DTC is mostly not coming this year (its delayed) .. but still we will see confirmation only in next 1 month

          Manish

  23. Chandra MOhan

    Thanks a lot for very useful information in simple words. amazing work. I love it.
    Thank you very much Manish Ji, I want to ask Manish ji, I want to make some investment in existing PPF account. Should i deposite it now. or in pertuculer date.

  24. sudhank saxena

    Very Nice Article !! On every visit to this site, i got to know something new and interesting. Really thanks for contributing such articles..

  25. James

    Hi,

    Thanks for the blog. Could you please clarify my question below.

    I understand that the maturity period of PPF account is 15 years. I invest 70000 every year mostly in the march in my daughters name who is a minor. The investment started in 2002 and it is meant for her education.

    Would i be able to widraw 1050000(70K*15) + the accrued interest in 2017? What is the maturity period for remaining years investment ?

    Bit confused ,

    Regards,
    James

  26. seenu

    Amazing clarity! kudos to you
    er…silly doubt please….are there any investment avenues available where investment is compounded monthly ,weekly or daily ??????

  27. alpesh pancholi

    manish, very good article…
    my question is instead of paying 5000 pm in ppf, can i open an recurring deposit a/c of 5000 pm for 1 year and have interest and invest this amount in ppf so i get double interest (rd+ppf). is my assumption true?

    • Alpesh

      No , your assumption is not correct . if you invest in PPF every month, anyways you will get the interest on that amount deposited, so investing in FD and then putting it in PPF makes no sense . In RD you get monthly interest, in PPF also its computed on monthly basis . Do some maths on paper and you will realise what I am saying

  28. Nilesh

    Hi Manish,
    its really gr8 help,
    i was an NRI where no taxes r applicable, bt its my first time to file return.
    so i m also looking for PPF. Infra bond.
    wht best u vil suggest me.
    thanks in advance.
    Regards,
    Nilesh

  29. Some information which might be helpful to readers:
    0)An individual can open a Public Provident Fund Account in his own name. He can subscribe any amount in multiples of Rs. 5/- of not less than Rs.500/- and not more than Rs.1,00,000/- in a year in his account.
    1) The subscriptions can be deposited in lumpsum or in convenient installment of not more than 12 installments.
    2)It is not necessary to deposit subscription in every month of the year. The amount of subscription can also be varied to suit the convenience of the subscriber.
    3)The account can be closed after completion of 15 full financial years or the expiry of 15 years from the close of the financial year in which the initial subscription was made. This is, of course, optional and the subscriber can continue the account even after the period of 15 years for any number of further blocks of 5 years by exercising an option in form ‘H’.

  30. Ashish Shah

    Manish,
    Agents will have to stop he practice of passing commission to client as the cost of leaving is getting high & high day by day & if they will not stop giving commission they will be finished as competition in each field has grown up to worst level rather to say unethical level which will lead to frustration either they will loose the business or companies will directly take the business which has been nurtured by the agents
    & at that time the agent will not have any option but to seat at home

  31. Rajesh Jodhani

    Hello Manish,

    It’s an awesome worksheet. I like it very much. I also seen your video on YouTube. Nice 1 !!!

    One query is: If i deposit money on 5th of the month, it will be counted as “Before 5th ” right?

    Thanks,
    Rajesh

  32. Harish

    The article and video were very well compiled and very clear. It helped me understand the PPF concept very clearly. Thank you very much.

  33. Amit Tiwari

    Hello Manish,

    It’s an awesome article. I like it very much. Now, I am aware about that how to invest in PPF.
    Last time i got help from you about the PO MIS.

    Now I want to invest in Mutual Fund through SIP and i don’t know the about the
    good fund available in the market. Can you please help me again.

    Thanks a lot

    Thanks,
    Amit

  34. S Gupta

    We have closed the PPF account of our father on his demise. the bank branch closed the account on 29-5-2011, however interest for the period from 1-5-2011 to 29-5-2011 was not paid. It was told that interest for the part of the month shall not be given. we have lost almost 30000.00. please inform whether the same is correct. we could have closed the account on 31-5-2011 , could have waited 2 days.
    what action we can take against the branch if such is not case…?

    • S Gupta

      Bank is correct . As per PPF rules, the interest for any month is on lowest balance from 5th to the end of that month (not the date of maturity of PPF) , so in that full month , even 30th will be counted and hence the lowest balance from 5th to 30th was ZERO , which was on 30th , so interest was NIL , it should have been closed after the end of the month, only then you must have got the interest for that month

      Manish

  35. Monika Mahajan

    Wow ! A very helpful tool . Saved it and planned out my and husband’s ppf investment for the year :)
    Its really great that u can see the impact of various combinations of investments , on the interest credited at the end of the financial year .
    NO need to wait till the financial year end :)

  36. Great tool Manish and thanks for making it easily available. I just checked my interest for FY 2011-12 and it matches exactly. For others, who want to check the interest, the PPF interest is 8% till Nov, 11 and then its 8.6% from Dec11 to Mar12.

  37. gnanesh

    thanks for uploading the video . before i was not knowing how the interest r calculated but after seeing the video i came to know

  38. Cute Flower

    Hi Manish,

    I created a PPF account with SBI early this year and did a online transfer of 1 lakh from my savings account to PPF account on Feb 06, 2012. I see interest of 717 INR credited to my ppf account on March 31, 2012. I thought invest lumpsum yearly once will yield more interest but I received only 717 INR. Please clarify this.

    Another question is, since I invested yearly lumpsum amount on Feb 2012 and again when I should I invest my yearly investment? Same month next year ie 2013 Feb?

    I appreciate your promt response. Thank you

    • Satheesh

      Hi Cute,

      since u invested it on Feb 6th u wont get any interest for that month, u will get interest only for the Month of March which is

      =((100000/100) * 8.6)/12 = 717

      and regarding your second query, max 1 lakh restriction is per financial year which ends by March 2012 only, i think u can immediately invest another 1 lakh in April 2012 itself.

  39. Satheesh

    Hi Manish,

    I had following doubts on PPF Investments..

    1) Can i Invetst in PPF for a period of 25-30 years instead of 15 years, and after 25-30 years instead of complete account closure,can i withdraw my money monthly basis(Interest earned for that month only, sothat principle will be untouched)

    2) what was the best option to open a PPF account, is it better to open on my name or my kid name..?, what was the benefit if I open it on my kid name

    Thanks
    Satheesh

    • Satheesh

      You can have it for 15 yrs first and then keep extending it for 5 yrs term whenever you want .

      But opening it on your kid name means that once he is major , he gets control of it !

      • Satheesh

        Manish,

        Thanks for your quick reply.can u please answer my below queries also..??

        – After 25 Years can i withdraw my money monthly basis(Interest earned for that month only, sothat principle will be untouched)

        – what was the maximum withdrawals allowed per year,i think Credits are restricted to 12 max.

        Thanks
        Satheesh

  40. Rohit Srivastava

    Thanks Manish,
    It is a simple though very very useful presentation.
    Great work, much appreciated!!

  41. Manish

    @ Manish..Great Work Done,
    I always read your articles, you are doing a great job Manish.
    even i have a folder named Chauhan in my gmail.

    thanks for your useful articles on investment related domains.

    sincerely APPRECIATED!!!

  42. Subhasis

    Hi Manish,

    First of all thanks a lot for make us understand the calculation in such a simple way. It really helps. When I am using the calculator and trying to change the Lowest balance it is not changing as this file is read only. Is there any way I can put lowest balance to calculate my investment?

    • Subhashish .. I dont think it will be possible to make changes in the file now . You already know the process. just use the same trick to make a new excel ,. how tough it will be for oyu ?

  43. SANTOSH

    Hi Manish,
    I am a senior citizen and my PFF already got matured in April this year. When inquired SBI regarding continuation/withdrawal i am told i can withdraw only 60% and balance has to be extended for 5 yrs if i want to keep PPF Account.. Kindly advise which is profitable: withdraw full amount and get 10% or more interest on reinvestment as FD or continue the balance amount in PPF at 8.6% interest and also get Tax benefit?

  44. Rijo

    Manish,

    I have a question ,

    I have a PPF account in SBI , Banglore branch and would like to get the amount transfred via ICICI bank. As you mentioned will be going via thrid party account addition.

    the question here is , How can i collect the amount after maturity. Will it get credited automatically to my ICICI bank or should i open another account in SBI for getting this credited.

    regards
    rijo

  45. Rupesh

    Hi Manish,

    Thanks a ton.

    This has really helped me to understand in depth knowledge of PPF calculation. I have wasted my first five years of PPF account by not paying much of the interest to invest in that. Now i will concentrate first to complete the target in this a/c rather then investing at some other places.

  46. Neela Iyer

    Hi Manish,

    I invested Rs. 1,00,000 on 8th feb 2012 and interest @ 8.6% fetched me only Rs. 717/- at the end of the year, mine being a new account, please help.

    Thanks

  47. Neela Iyer

    The 3rd scenario wherein you have stated that one should invest in ppf at the beginning of the financial year ie april so as to avail of the entire benefit of 8.6% in that particular year, am i right manish?

  48. Babbu Pawar

    For PPF, Suppose anything happens to the account holder in between 5~6 yrs after PPF acc opening,
    Q1 Wheither all money deposited till 5~6 yrs is credited to the nominee with the interest till that date ?
    Q2 If not, then when it wll be credited to the nominee ? with interest ?
    Q3 If it is after 15 yrs, then after 5~6 yrs onwards wheither nominee has to pay minimum 500 yrly to that account or not required ?

    Please clarify these issues…
    Thanks in advance…..

  49. Babbu Pawar

    If no for (after 5~6 yrs) then, Upto the maturity (15 yrs) nominee has to continue the account with the min 1 yr premium (500 yrly) and so on …..is it true ?

    Please answer…..
    Thanks…..

  50. vipin

    Dear manish,

    Please tell how the interest is calculated on E P F. Hope this is calculated like Recurring Deposit of Banks. Please explain

  51. Very nice article… I was trying to do calculate PPF interest amount to confirm if what is their in passbook is correct or not, but had a very tough time.

    Thank you Manish!!

    Can you publish a chart of interest rates of PPF from the year 2008 or you can refer me to elsewhere?

  52. nikhil

    Thanks Manish…
    Manish can you tell me the interest rate of EPF for FY 2011-2012 and also current FY 2012-2013.

  53. Lakshmanan VR

    hi Manish,
    This article is really helpful. But I have a doubt regarding this. Say we deposit Rs.5000 every month as in case 2. Isn’t it like, accumulating this amount and investing it at the end of the year will be less fruitful than investing it monthly(In this case, We will get the interest for that Rs.5000 each month as well). In This case, for the next year, we could have deposited Rs.62795 instead of Rs.60000 (if we had not used this amount in any other investments).

  54. Babbu Pawar

    Hi Manish,

    I have opened PPF acc. in the july month of 2012, So when will they considered as acc. starting date wheither it is 1st apr 2012 Or 1st apr 2013 ?

  55. Babbu Pawar

    For income tax declaration under 80c, PPF will be coming, for this only passbook xerox is enough to attach with declaration or they required some certificate type of things ? for claiming purpose….

  56. Joseph

    Hi Manish,
    I have few questions about PPF:
    1) Is it possible to open two PPF accounts, one in my name and another in my son’s name who is a minor (16 years) ?
    2) Is it mandatory to deposit some fund every year once PPF A/c is opened ?
    3) Can the PPF account be moved to another bank ?
    4) What is the advantage of PPF or RD account over NSE other than the NSE interest is taxable.
    Kindly advise, Joseph

    • Joseph

      1. NO , only one PPF for one person
      2. Yes, its Rs 500 .. but incase you cant , you will have to pay a Rs 50 penalty for each year and Rs 500 for each year later.
      3. Yes, even to another branch, bank or post office
      4. First advantage is that its purely secure from govt, it cant be attached in a legal case and even maturity amount is tax free

  57. Joseph

    Thanks Manish. I was not aware of the penalty. When you say one PPF one person, child under 18 cannot be considered ? ie either PPF on child or PPF on Father/mother. Am I right ?

  58. Nikhil

    Again same question of comment 198

    I have opened PPF acc. in the july month of 2012, So when will they considered as acc. starting date wheither it is 1st apr 2012 Or 1st apr 2013 ?
    Ans – 1st apr 2013
    means i will not able to deposit from july of this year or the interest will not calculated for 2012

  59. Harsh Puri

    A related question is should you have SIPs into PPF, like putting in 10K every month, or accumulate this money through the year and put 1.2 laks in one go on the 1st April every year.

    I guess I know the answer would be to put in 10K every month, to benefit from the power of compounding but would still like some confirmation. Manish?

  60. Rajesh

    Hi Manish

    I have invested in PPF, just want to know if there is any Max limit of amount to be deposited in PPF Account over the 15 years.

    For eg if an putting 50K / yr amounts to 7.5 lacs over 15 years…is it ok..?
    Also the max limit in an year is Rs. 1 Lac ?? right

    thnx

  61. PRADEEP

    Hi Manish,

    I have been operating the PPF account for the last 10years.Now i have opened an a/c in my sons name (minor).Let me know wheter the foll. is ok..

    i will be live in my a/c by investing Rs500/year

    Invest Rs 1L in my sons account & claim tax benifit

  62. Pankhuri

    If I open my PPF accuont in Dec 2012 after date of 5th and deposit 100000 rs.
    So I can get Interest from January 2012 to March 2012.

    Am I right?

  63. Ganesh Ram Anand

    Hi Maneesh,
    I have opened PPF account with SBI Bank, on 9th April 2011 with Rs.25000.
    I see on 31st March 2012 the interest credited is only Rs.1883.00.
    Let me know how can i get this corrected and whom to contact?

    Thanks,
    Ganesh

      • Ganesh Ram Anand

        When I checked my internet banking in SBI, the interest rate shown is 8.8% . Going by that, I should have got around 2000. or does the interest rate is been reduced after that?

  64. Manoranjan Panigrahi

    Dear Sir

    I want to open a PPF account in SBI, Orissa. I just wants to know that if i deposit Rs.1,00,000/- in every year in Account for 15 years , after completion how much i get including interest . Can you please provide me the details calculation on excel format .
    Please help me on this case .

    This is for kind information ,please .

    Manoranjan

  65. Kashi

    Hi Manish,
    I am 26 and working for Govt of Karnataka(We don’t have pension scheme any more from employer) . I have been investing in 5k/mt PPF since 2011. I was just thinking to make this as my pension plan. Is it possible to extend the PPF A/C for another 15 years (Total of 30 years), still I reach 55 and make that as my pension plan.
    Thanks in Advance,
    Kashi.

  66. Manish Kr Sinha

    Manish Chauhan sir,

    I have a query. I (age 35 yr & 6 months) am working in Indian Railways and want to open a PPF account in SBI. Right now, I have 1 lac rupees to invest in PPF and also will have 1 lac rupees just before 5th April 2013 for investment in next financial year. I want to get maximum benefit from PPF account (which is for 15 years extendable for further blocks of 5 years).
    Should I:-
    1) Open the PPF a/c right now (November 2012) for 1 lac and another 1 lac before 5th april 2013?
    OR
    2) Open the a/c only just before 5th April 2012?

    If I select the first option, my apprehension is that the period from Nov’12 to Mar’12, i.e., 5 months will be counted as 1st year of the 15 year block period and hence, I will be at loss. It seems then that the second option will be better.

    If you feel that I am not able to express myself what I want to say, then may you simply suggest please that which option is better for me.

    Regards
    Manish Kr Sinha

    • Manish

      You can open the PPF right now , as the end of the year is considered as the “openeing” date . So even if you open it on Nov 2012 , the opening date will be considered as end of year 1st Apr 2013

      • Manish Kr Sinha

        Sorry, but I didn’t get you. Do you mean to say that the 15 year block period will not be decreased by one year even if I open in Nov 2012?

        Manish Kumar Sinha

          • Amit Chakraborty

            Can I get the Interset for 16 yrs means from nov 2012 to 1st april 2013..& Whether the limit for 2013 will be calculated after sumation to the deposited amount for this period ( Nov 2012 to 1st april 2013) as you say that opening date will be taken as 1st april 2013

              • Amit Chakraborty

                My query is.Suppose from Nov 12 to 1st April 2013 I deposit 10000 & from April 2013 to March 2014 I deposit 60000 then pls confirm whether the sum of interest( Monthly) for the period Nov 12 to 1st April 2013 will be add the main balance ( 10000) as it is now opening balance for year 2013 or it will continue till end of year 2013(March 13)
                And second query is can I deposit 100000 rs for the period April 2013 to March 2014 whether the limit will be exceed or not ( As I previously deposit 10000 in Nov 2012 to March 2013)

  67. Kiran.S.N

    Hello manish,

    I would like to invest monthly Rs. 1000/- in PPF account from my salary in my child name( 6 days old girl baby) . Is it worth when compare to invest in insurance company. Please reply.

    Regards
    Kiran

  68. Amit Chakraborty

    Dear Sir,
    I have three query
    1. I have recently (12.11.2012) opened PPF acount. Pls tell me the mature date.
    2. If I deposit amount in 12 installment , pls tell wheter the amount will be fixed(for 12 installment in a year) or variable subject to the maximum limit
    3. During opening PPF in form the maximum limit was 60000( Old form).Pls tell can I deposit more than 60000( As the limit is 100000 now) & can I update the passbook any time from any branch

  69. sadashiv kashyap

    Dear Manish ,

    I afraid not jump to conclusion but i think case 2 I have doubt in calculation…..

    When we compute in excel we get 62795 but when we compute logical method we get 62759.77 …….I dont think post office will round up interest bz the total difference is 35.22514 rs per year…….if suppose post office have 5000 coustomer and they are paying 5000 pm so post office will suffer 176125.7 loss….

    As far as i know if we paid premium 2 or three rupees extra on current year inurance co. adjust 3 rs in next year premium .

    So how will post office accumalte.17 pasia extraa in first month.

    means if a person earn interest on first month post office do calculate 35.83333333 not 36…..Its my thought I m not sure what exactly they do…..

    its debating issue ….

      • Kunjan Patel

        Hi, good point by Sadashiv…
        Here’s how I think it will/should work:
        Interest calculated is 35.83 for first month…like wise upto 2 decimals for each of the subsequent months….the total of interest will be rounded UP or DOWN.

        Excerpts from http://www.indiapost.gov.in/POSBActs/PPFRules1968.pdf
        Provided that where the interest to be credited contains a part of a rupee.
        Then, if such part is fifty paise or more, it shall be increased to one complete
        rupee, and if such part is less than fifty paise, it shall be ignored.

        The catch here is the word CREDITED, so the interest is not rounded monthly, but only at the time of credit to the account. This should not be much considering it will be +- 50 paise per annum per account.
        Also that in general logic, there should be equal cases of +50 and -50 paise, and they would even out :)

  70. Vijay Zanvar

    I make investment in PPF at the end of FY; that is on or before 5th march. I start with investing lump sum in a balanced or hybrid mutual fund in a such a way that it completes a year on or before 1st March. Such funds (65% equity) generally give absolute (tax free) returns in the range of 10% to 20%. Assuming 20%, if I invest 60,000, say on 20 February 2012, it would become 72,000 by the time I redeem it after 20 February 2013. I would then invest this amount in PPF on or before 05 March 2013. My PPF balance for the FY 2012-13 would then be 72,516 (considering 8.6%). Had I invested this directly in PPF at the start of FY, the balance would be 65160!

    Of course, this require meticulous planning!

  71. Vijay Zanvar

    I have a question regarding the “lock-in” period of the PPF. It is 15 years. Assume, I make invest Rs. 1 L each year, starting 2012 to 2020. PPF matures in the year 2027-28, and assume the PPF balance to be 15 L. Can I withdraw all 15 L in 2028? That is because, if you go by “lock-in”, does it mean I can withdraw only the investment made for the year 2012? And so on …?

  72. Chethan

    Hello Manish Chauhan,

    Thanks for sharing the PPF calculation,you explained in such a simple way with an example so that anybody can understand.

    My question is-I am planning to invest in PPF from this year(2013),the bulk amount which i am planning to invest will be on 1st of april every year(including this year 2013) Can you please let me know which is the better options out of below 2 as we have 15/16 years of lock in period.

    1) Is it better to open a PPF account in the month of MARCH 2013? when does it get mature,please specify the year and month.
    2) Is it better to open a PPF account in the month of APRIL 2013? when does it get mature,please specify the year and month.

    Please answer to this query,i have been carrying this mystery from a long time,thanks for your reply in advance.

    Regards,
    Chethan

    • PPF matures exactly 15 yrs from the end of the date of the financial year when you open the PPF account. so if you open it on 15th Aug 2012 , the end of the year is on 31st Mar 2013 . Add 15 yrs in that ..

      So 31st Mar 2028 will be maturity

      So if you open it on March 2013 , your end of the year will be 31st mar 2013 and your maturity will be 31st mar 2028 , but if you open it on April 2013 , then it will be 31st mar 2029

      Manish

  73. manvi

    Hi manish ..gr8 article…by reading ur article i opened PPF account in 11th-november-2012,But still date I did not deposit any amount ..except opening amt 500..
    So when should i deposit amt to get maximum benefit of interest ..I plan to deposit once in a year…I want to deposit 60000 …
    Another question is it makes any difference to deposit monthly or yearly
    what will be my maturity year…?

      • manvi

        i wl deposit 55000 on first week of february for saving tax …so cn i get maximum interest benefit? actully i dnt knw whether go 4 monthly deposit or yearly ?cn it make any difference?can i again deposit on 1st april -2013? pls reply? and whatever i deposit its for 2012-2013 na?wht will be my maturity year? if i want to deposit yearly thn wht will be date /month that i should deposit on evry year to get maximum interest benefit….In case of month i knw 1st to 5th …pls reply asap

        • Anand

          Since yr date of opening is Nov 2012, the counting starts from 1-Apr-2013.
          And date of maturity is 1-Apr-2028.

          To get maximum benefit, you should invest whatever possible on 1-apr every year.
          If you do not have enough money in April, then you should invest monthly.

  74. pankaj

    I had opend PPF account in icici in Jan 2013 and i want to invest 60000 rs in it, please help me to know the intrest amount calculcation ?

  75. Sampath

    Hi Manish,

    If i invest 50000 on 01.02.2013.

    1. my PPF a/c open date will be considered as 01.04.2013 right?

    2. will i be able get tax exemption of 50000 for FY 2012-13 or not?

    Please Reply

  76. sangita

    Firstly, thank you for the knowledgeable article.

    Im planning to open an PPF account in SBI on 1st april 2013 …or before 5th april 2013 …amount of 5k per month for 15 years. Im unemployed. Can my husband avail tax benefits on the amount if its open on my name.

    Would u suggest me to open in his name for the tax benefits or any other benefits ( which i cant avail due to be unemployed) or doesnt matter. please suggest.

    Thank you
    sangita

  77. sangita

    Hi..
    one more question…

    have not really calculated but a generic question…if deposits of 60000 yields around 33 lakhs after 15 yrs…then 1 lakh deposits should yield double accordingly in 15 yrs time. Am i correct ? or the calculation is different? If different, then whatz the amount which gives maximum yield/interest and thereafter doesnt accumulate much interest.

    Thanks again,
    sangita

    • higher the amount, higher the maturity .. 1 lac will yeild the increased amount than 60k .. as 1 lac is 66% higher than 60k , then maturity amount will also be higher by 66% only, which is 50 lacs !

  78. narayan

    Hi Manish,

    First of all thanks a lot for helping out all of us. I am a CA by profession and really appreciate yur article the way you have explained and level of knowledge.

    I have one query for you – I have moved to new organisation from my previous org. I want to transfer my PF balance from previous org to new, please let me know will it make any difference if I withdraw if I wathdraw before the end of march? will I get interest for the current year if I withdraw before march ?

    Thanks again..narayan

  79. Raghav Gupta

    Dear Manish,

    I have a PPF account which is already 15 year old.

    1. I assume that I can withdraw all amount without paying any tax.
    2. What about the investments that I make today, when can I withdraw that amount.

    Thanks in advance,
    Raghav

  80. Raghav Gupta

    Hi Manish,

    Another question:

    1. Is it correct to assume that if I deposit 1 Lac on 1st April 2013, I will get an interest of 8000 (assuming 8%) on 30th April end and Rs 1,08,000 will be the principal for the interest next year.

    Regards,
    Raghav

  81. VASU

    Hi Manish,

    Is there any chance of ppf interest getting incresed this year to around 9 or 9.5% as it is an election time :)

    Thanks,
    Vasu

  82. ashwin

    Looking at case 1, I get Rs.430 interest on every month on the Rs.60,000 invested. Shouldn’t I be getting interest on the Rs.430 I earned in the 1st month for the next 11 months? There isn’t any monthly compounding as far as I see.

  83. S. S. Biswas

    Tkhanx Manish, for your valuable guidance about PPF A/c. But I have my other question about my previous employer’s PF Account. Can you please help?

  84. Chary

    Hi Manish,
    I always use FD for my Tax Saving.
    I have no idea on PPF…No i have .) very informative article..

    PPF is better than FD.? pls suggest

  85. UJJAWAL DUTTA

    Hi Manish , I have 3 Question. Please reply.
    Q1) Can I pay 12 installment in 1st year.,then 1 installment in second year, 6 installment in 3rd year so on ?
    Q2) Can I pay 50,000/- in 1st year , 40,000/- second year, 80,000/- in 3rd year so on ?
    Q3) To do the above[ Q1) & Q2) ] variable installments . Do we have to inform the bank in the time of opening the PPF account ?

  86. vivek

    Hi manish,

    Wonderful explanation.

    Can you please clarify my doubts.
    I opened ppf account and invested 40k on feb 2012 and again invested rs.500 on march 11 th 2013.
    1. Which date will be considered as acc opening date?
    2. What will be the maturity date?
    3.in my case investment for 1 year means feb 2012 to feb 2013 or march 2012 to march 2013 as financial year starts from March ?
    4. As I opened my account on feb 2012 , does my account has 2 years as of march 2013

    Please clarify ..

  87. dr sarang wadkar

    hi MANISHsir,
    1]max limit of investment ppf is one lakh,if iinvest 1 lakh more for the same year then on extra amt[ when & how much ] i will get intrest ?
    2]if i invest total amt[1lakh] before 31 march rather investing in monthly basis how much money i m lossing ?

  88. Ravi Agrawal

    Hi Manish,

    Fantastic blog !!!
    Thanks for a fact-full information about PPF & its interest calculation process.

  89. mohinder singh

    Hi Munish Chauhan,
    Seeking for your valuable guidance.
    I have deposited Rs. 100000 in fin. year 2012-13 on 21st.march 2013.
    Is it my 1st. year upto 31.03.2013 as fin. year ends after that date. And 01.04.2013 to 31.03.2013 will be my 2nd year.

  90. Mayank Saxena

    Thanks a lot for the wonderful information- Inspired by your articles, all in my family of 4 are having PPF now :-)
    My father already has a PPF account started this year in March 13, he wants to give my son (his grandson) some childplan/PPF etc. But he already has plans to invest 1 lac in his own account (grandfather’s account) every year.
    Q1: Can he open a PPF account for his grandson being his guardian and deposit money in the grandson’s account?
    Q2: We know maximum tax deduction is 1 Lac. But can he contribute 1 Lac to his account every financial year and also 1 lac to his grandson in the same financial year, and just take tax deduction of 1 lac?
    Q3: MOST IMPORTANT QUESTION: After reading your articles, I cannot find better long term investment plan for my son than PPF. I have checked ICICI Smart Kid, Kotak Assured Income Plan, Kotak Educare, but all of them are giving a rate of 6-7% in long term besides insurance benefits. I am not concerned about insurance benefits but just suitable returns for my child when he goes to college. All in my family has PPF and are depositing 1 lac in their PPFs annually as well. So what option do I have for my child now? I am looking for guaranteed returns so mutual funds are not an option.
    Q4: If a person opens an account in 1st Jan 2013, the PPF account will be opened on 1st Apr 2013. So will he get the interest of 3 months (Jan, Feb, Mar)?
    Kindly reply soon and thanks again for the amazing articles!

  91. viki

    Hi Manish,
    Thanks fir explaining the details about PPF account so clearly.
    Just one question Which one you will refer out of the 3 if I keep the remaining balance in bank or as a Fd (not tax saving )

  92. Ganesh

    hi sir, i have created my PPF ac. on 23-03-2013 and invested 5000 as initial. Now my question is whether i could able to invest 95,000 or 1,00,000 as on 01-04-2013 since its a another fin. year ??

  93. Mayukh Mahapatra

    Need help with PPF amount submission.
    I opened PPF account through ICICI bank on on 18/02/2013

    1st deposit 500 (18/02/2013)
    2nd deposit 63,500.00 (12/03/2013)
    3rd deposit 36,000.00 (28/03/2013)

    Now while i am trying to deposit 1,00,000 RS
    on 1st April 2013, Its saying “Transaction is not permistted”? Is there any limitation for PPF deposit like this way?

  94. abhijeet Bhusale

    awesome work dude :)
    your article always meaningful and always help me.
    i have one query regarding ppf account.
    1) Is pre-mature withdrawals can be made from the end of the sixth financial year from when the PPF commenced?
    2)I heared that maximum amount that can be withdrawn pre-maturely is equal to 50% of the amount that stood in the account at the end of 4th year preceding the year in which the amount is withdrawn or the end of the preceding year whichever is lower, is it true?
    Thank you very much .

  95. Satheesh

    Hello manish,

    I have a opened a PPF account two months back.

    Here is the date and value deposited in the account.

    Feb-5th – 800INR( Opened new a/c)
    March-1st -800INR.

    As you said, at the end of the financial year, we will get the interest .

    I got only 18 INR as the interest deposited for the above value at this financial year end.

    I really do not understand how could be just 18 INR.

    8.8% of 800 is 70.4 INR for the first month interest.
    8.8% of 1600 is 140.8 INR for the second month.

    But i got only 18 rupees. How ?

  96. akanksha Gupta

    Hi,
    I read your way of calculation but still i m not able to calculate my interest. so can u plz help me with it.on 31-march-13 i got interest of 7524 INR

    27-Jan-12 CASH DEPOSIT 1000
    31-Jan-12 BY TRANSFER 68,900.00
    31-Jan-12 BY TRANSFER 100
    31-Mar-12 CREDIT INTEREST 1,003.00
    30-Oct-12 BY TRANSFER 10,000.00
    03-Jan-13 BY TRANSFER 15,000.00
    04-Feb-13 BY TRANSFER 25,000.00
    04-Mar-13 BY TRANSFER 29,000.00

  97. Manish Sharam

    I opened a ppf account in Apr. 2012 in SBI , and i invested as follows:
    24 Apr. 2012 1500/-
    14 Sep 2012: 5000
    23 Oct: 5000/-
    14 Nov: 5000/-
    17 Dec: 5000/-
    14 Mar 2013: 20000/-
    18 Mar 2013: 20000/-
    25 Mar 2013: 3500/-
    Total Amounting to Rs. 65000/-
    But the interest credited to my account is Rs. 781/- only
    Can you please explain?

    • Satish

      Hello Manish..

      I have read in a site that the PPF is best when the amount is paid within 5th day of a month. Because the interest rates are calculated on 5th of the month. May be, you can check the interest of April month and let us know whether you got the interest.

  98. Raj

    Hi Manish,

    Here is a scenario that may be of helpful to your forum’s reader as well as I request to provide your comment to my query below:

    I had given an application for transferring my PPF a/c in the 2nd week of January’13. SBI have closed the same a/c in 3rd week of Jan’13, credited the accumulated interest: X till the account closing date. My a/c has been transferred to the new SBI branch and in the 3rd week of March’13, bank has opened my PPF a/c with new a/c number. Now on 31/3/2013, my PPF account shows the final interest amount credited as: X, which is ~11K less than the one I had expected. So I have lost interests for the months: Feb and March, though I did not withdraw money from the PPF A/C.

    I want to know that is this the, i.e. not paying of interest for Feb and March’13, according to PPF or SBI rule?

    Thanks,

  99. Mayur Godse

    I opened my ppf account in Oct 2011.The details of my account is as follow

    On 31/3/2012 balanced was 25000 Sbi gave me Rs 535 as interest so balance on 1/4/2012 was 25535.
    For Financial year 2012-2013 the details of amount deposited is as follow;

    3/4/2012—-5000/-
    3/5/2012—-5000/-
    3/6/2012—-5000/-
    4/7/2012—-5000/-
    4/8/2012—-5000/-
    2/9/2012—-5000/-
    2/10/2012–5000/-
    3/11/2012–5000/-
    3/12/2012–5000/-
    4/1/2013—5000/-
    3/2/2013—5000/-
    3/3/2013—5000/-
    So on 31st March 2013 the balance was Rs 85535/-
    according 8.8% interest rate I supposed to get around 7500/- as interest on amount 85535
    but only 5100 is credited as interest.So should i ask the bank for the details.

    • Raj

      Sir, you took the time to type so much details. Did you take time to read the article? How are you expecting 7500 in interest? The article explains in detail, including almost your example of 5000 per month calculation, however you still haven’t read it. Interest is calculated every month on that month’s balance. So your each month’s interest will only be on your balance at that time.

      You are just taking the year-end balance and expect the interest for entire year on balance you arrived only by end of year!

  100. B.Natarajan

    Hi Manish,

    All of my family members (Self, Wife, daughter & Son) have opened PPF a/c. Can each of us deposit 1 lac in their respective a/c every year? For my daughter and son, i have given my wife name as gaurdian.

  101. Dhiraj Haloi

    Sir,
    I deposit in my PPF accounts as follows

    11-07-2009 rs 1000; 14-08-2010 rs 1000; 11-12-2010 rs 9000; 09-08-2011 rs 7000; 14-09-2012 rs 5000; 14-12-2012 rs 20000; what will be interest and balance at the end of 31 march 2013. Postal department credit only rs 1704 only. Is it correct of incorrect? If incorrect what is the correct figure?

  102. Mujeeb

    Hi Manish,
    Very nice article….Can u please provide the password to unprotect the sheet(ppf calculator) as I have opened PPF this year. In the sheet Lowest Balance(50,000) is fixed & protected

  103. shankarnag

    Hi , I want to open a PPF account can u suggest me that is it better to open PPF in sbi or else can i open with ICICI bank

  104. Ketan Karnick

    Extremely useful information. I have went a step ahead and created a excel sheet that takes yearly investment into consideration for the next 15 years and tells me the projected return after 15 years. Also, it helps me find a combination to accumulate maximum interest for a year, if I don’t wish to pay lumpsum 1,00,000 on 1st April.

    Again tanks a lot for showing the way….

  105. Vijay Nagarajan

    Can I open a PPF account online in any bank just for the sake of it in 2013 and start investing money every year for 15 years starting in April 2014 with 2014 being considered as the first year?

  106. Riya

    Hi Manish,
    First of all thank you for your article ppf calculator in jagoinvestor.com it is a great article really helpful.
    I have a question i have a ppf account in United Bank of India (with balance INR500 and last year i had not deposit anything that means inactive) and letter i have opened a ppf account in SBI bank(with balance INR500).So my question is that what i have to do now? i want to operate only sbi ppf account is it possible?
    Please give me suggestion.
    Thanks & Regards,
    Riya

  107. rabi

    Hi Manish,

    I have 2 simple queries on PPF. Last year I have invested 52000 on my PPF account.
    Query – 1 : Can I added up 48,000 as last year investment and 1,00,000 for current year investment.
    Query -2 : If I added up some lump sum amount interim of this FY-2013 then how the interest will be calculated. For eg. on Month of July 5th 2013, I will add Rs.1,00,000 to my PPF account. So will it calculate interest on 1,52,000 (1,00,000+52,000).

    Thanks in Advance.
    Regards,
    Rabi Narayan

  108. Ajit

    Hi Manish,
    Nice article. But I have a query about Penalty For Default in Payment. I could not deposit PPF subscription for last 4 years. I want make the default good by paying penalty. what will be the amount of Penalty. The Rule says fee of Rs.50/- for each year of default. I have calculated it in two ways. (default of 4 years)

    Year Subscription Penalty (Method 1) Penalty (Method 2)
    2009-10 500 50/- 200/-
    2010-11 500 50/- 150/-
    2011-12 500 50/- 100/-
    2012-13 500 50/- 50/-
    2013-14 500 — —

    Total 2500/- 200/- 500/-

    Will you please tell me which amount of penalty is correct?

    Please guide.
    Regards
    Ajit

      • Ajit

        Thank you, Sir
        My wife’s PPF account is with SBI and mine with Central Bank. For the four years default , SBI calculated fee by the second method i’e Rs. 500/- and Central Bank calculated it @200/-. I will check with SBI officials.
        Thanks once again.
        Ajit

  109. Sharnesh

    Can i open 2 PPF accounts one in SBI and one in Post offfice, because My PPF account is not getting transferred to SBI

  110. Sumit Sachdeva

    Thanks Manish for such a useful information… I was amazed to see why I have recieved such a low interest. Now when today I read your article I came to know how this is getting calculated. Thank you very much.

  111. Nandkumar

    Manish Sir, It is very usefull information. its clear my douts about PPF. ur calculater is also very usefull. Sir, i want Formula which u have use in ur PPF calculater. pl give me this.
    Thank
    Nandkumar

  112. manish

    i invested Rs.1 lakh on 31st march 2013 my question is what if i continue to invest the same amount every year on the same date till maturity?in that case what will be my accumulated amt after 15 years.

  113. manish

    Dear manish i know that rule but i want to know what would be my accumulated amt after 15 years.my invested amount :1 lakh on 31st march 2013 and wants to invest the same amt at the end of each f.y.

  114. pankaj singh

    If a ppf account holder dies on 21/09/2013 and claim is presented on 21/10/2013 then interest will be given for FY 2012-13 or upto october 2013

  115. saijanumven

    Hi Manish,

    I have a PPF account in Post office which I opened 10 years back. Can I also open another PPF account now in any other nationalized bank (like SBI) and maintain both the accounts? Is it allowed?

  116. saijanumven

    Need your help in this investment question. Let us say I am opting for a Bima Bachat Lic policy (15 Year Single premium policy) and invest around 1,50,000, I will get a Maturity amount of around 2.8 Lakhs by end of 15th year. What will be maturity amount if I invest the same amount in PPF as my first investment, followed by smaller amounts for example 1000 every year..

  117. sanjay

    Hi Manish ,

    I have gone through the communication , i have one question , can I start my PPF account in between of the year. I am planing to invest 8500 / month before 5th
    . How much amount will i get after 15 years.

  118. Rajat

    Manish,

    I have a question here, dont know you have already covered or not?

    The logic is clear for the first year, but what about 2nd, and consecutive years?

    For the months of 2nd year – the simple interest will be computed only on the deposited/balanced amount in this financial year? Or the total balance that carried from previous year as well? Hope, I am clear about my Question?

  119. Rakesh

    Hello Manish,

    First of all thanks a lot for all your help regarding PPF.

    I do not have a PPF account so far but, I am planning to open an account now. As I read your answers for the queries above it is very clear that investing lump sum amount once a year will yield good interest on the principal amount.

    Now my question is:
    1. If I open the PPF account in December 2013 lets say Rs. 36,000 invested and every year 36k invested thereon until 15 years. How much would this total up to for 15 years?
    2. Can I open PPF account in the middle of the year and claim the same for tax exemption?
    3. As I am investing in December the interest earned for this FY is only for 3 months, correct??

    Thanks,
    Rakesh

  120. Swaminathan

    Mr MANISH YOU HAVE NICELY EXPLAINED PPF INTEREST CALCULATION. IT NOTED THAT THOSE WHO MAKE DEPOSIT BY CHEQUE SHOULD ENSURE THAT THEIR CHQ.IS CREDITED TO THEIR PPF A/C BT 5 TH. OTHERWISE THEY WILL LOOSE THAT MONTHS INTEREST. IHOPE I AM CORRECT

  121. Priyabrata Giri

    Hi, Manish. I wish to open a ppf a/c asap. Which one is better SBI / post office.
    Actually my SBI home branch is far away from my house. Plz suggest….

  122. Rupesh

    Few points to note:

    1. Formula for calculating value after N years
    a) When full amount P is invested before 5th March

    =FV(R,N,P,0,1)
    (Excel formula)
    Where R is rate of interest, P is amount invested

    Alternatively,

    = (P/12)*((((1+R)))^(N+1)-1)/R-1)

    b) When invested monthly before 5th

    =(P/12)*((1+R)^N-1)/(1-(1+R)^(-1/12.0069100579))

    —–
    2. It is recommended to invest full amount before 5th March than monthly mode. One has to virtually add Rs 317.34 to match the returns of monthly investment to that of annual investment of Rs 100,000 (Rate 8.7%). This is Rs. 3808 annually.

    —–
    3. Invest early, if possible, as soon as one joins a job. See the returns with PF age (I have shown beyond 15 years of maturity period)

    a) Single investment of Rs. 100,000 before 5th March.

    PPF age|Invested |Value |Factor
    5| 500,000 | 646,661 |1.29
    10| 1,000,000 | 1,628,011 |1.63
    15| 1,500,000 | 3,117,276 |2.08
    20| 2,000,000 | 5,377,334 |2.69
    25| 2,500,000 | 8,807,122 |3.52
    30| 3,000,000 | 14,012,053 |4.67
    35| 3,500,000 | 21,910,883 |6.26

    b) Monthly investment of Rs. 8,333.33 before 5th.

    PPF age|Invested |Value |Factor
    5| 500,000 | 622,939|1.25
    10| 1,000,000 | 1,568,290|1.57
    15| 1,500,000 | 3,002,923|2.00
    20| 2,000,000 | 5,180,074|2.59
    25| 2,500,000 | 8,484,046|3.39
    30| 3,000,000 | 13,498,042|4.50
    35| 3,500,000 | 21,107,114|6.03

  123. Naveen

    Hi Manish,

    I have opened my PPF account in Jan 2014, so does my PPF ends on Jan 2029 (considering 15 Years) ?
    OR does PPF opening have anything to do with financial year start & end (Apr to Mar) – if so when does my PPF ends, and what happens to money invested from Jan 2014 to Mar 2014.

    Thank You,
    Naveen

  124. Vishal jain

    Hi manish,

    I just had a baby few weeks back. I am aware that I should not buy any child plans available in the market. I have decided to open a ppf account in the name of minor.
    My questions to you are

    1. Can huf make payment?
    2. If yes, will it get deduction u/s 80c?
    3. I already have a ppf account in which I make payment of 1lac each year, can I make payment of another 1 lac in this account? I know that I will get 80c deduction in total of 1 lac only.
    Is there anything else that you would like to suggest.

    Thanks and regards

  125. Jai Prakash

    We have taken a Housing Loan of Rs 28 lakhs for 12 year period. The house and the loan is in the joint name of myself and my wife. This is our second house. I have one more house which is in my name alone.
    I am a Govt Officer and my annual salary Income is 17 Lakhs. I am retiring in Jan 2025. My wife is also a Govt employee with annual salary of 5 Lakhs.
    We opened two separate PPF accounts in our names on 20/02/2000. On what date will the PPF accts mature ? On maturity what should we do ? Should we both close our accounts on maturity and use the money for prepayment of a part of the housing Loan or we should extend one or both the PPF accts ? On maturity the sum in our PPF accounts will be about Rs 8 Lakhs and 7 Lakhs( Both total Rs 15 lakhs).

  126. MIRAL SHAH

    Sir,

    Glad to visit the website and its giving so much useful things about PPF.

    I have a query that If i am investing Rs. 1 k per month to PPF till 15 year , my total investment would be Rs. 1,80,000/- (15*12*1000) and i may get apprx corpus of Rs. 3,71,000 (int rate 8.7%). So here i want know that how much annual return i will get and how its going to be calculate ?

    Regards,
    Miral Shah

      • MIRAL SHAH

        Manish jee,

        When you can count on compounded monthly interest you will get amount of Rs. 3.71 lacks after 15 yeras. Example as below. So after 15 year what is my avg annualized return ? What its equation and how its going to calculate ?

        Month Principal Interest Amount
        MONTH 1 1,000.00 7.25 1,007.25
        MONTH 2 2,007.25 14.55 2,021.80
        MONTH 3 3,021.80 21.91 3,043.71
        MONTH 4 4,043.71 29.32 4,073.03
        MONTH 5 5,073.03 36.78 5,109.81
        MONTH 6 6,109.81 44.30 6,154.10
        MONTH 7 7,154.10 51.87 7,205.97
        MONTH 8 8,205.97 59.49 8,265.46

        Regards,
        Miral Shah

        • You have done it wrong ..

          You have to find the monthly interest each time and divide by 12 .. So for each month , the interest will be 7.25%/12 .. not 7.25% (its a yearly interest )

  127. shubha

    Hi Manish,

    Please share some light on this:

    My PPF account got transferred from Post office to SBI in second week of february-2014.
    In March 1st week, the account in being opened in SBI.

    When account is transferred from PostOffice, will the cheque include interest till the account closing day at post office?

    If Not, who should calculate and update that interest, bank or post office should issue a statement?

    What will happen to the interest between the time it is closed in PO and opened in bank?

    Thanks,
    Shubha

  128. Avadhut

    Hi,

    I want to invest in PPF for tax saving purpose for year ending 31st March, 2014. If I invest 40,000 today (on 13th March, 2014) Will I get tax benefit? Plus, when will I start getting interest on this amount? From April 2014 onwards?

    Also for the next year, is it wise to invest the same amount before April 5, 2014? In that case how the interest is calculated? previous years 40,000+ current year’s 40,000?

    Please guide.

    Thanks,
    Avadhut

    • Yes you will get the income tax benefit in the same year (2013-2014) because its still before 1st april, 2014

      The interest is calculated on monthly basis as explained in the article

  129. sanket murugkar

    Hi Admin,
    I am very much confused whether to open ppf account as i am 22 years..
    Is this is a right age to get into this investment ??
    and if i deposit 10000 rs yearly then how much approximately i will get back after 15 years.
    please help..
    thank you

  130. sonu sikarwar

    hii manish
    i opened ppf on 3 march 2013…when will it mature??i mean 15 years & when can i withdraw that amount??

  131. Ram

    Hi Manish,

    I have set up ECS on 5th of every month. does it have any difference if I made it on 2nd of every month? Thank you very much for this wonderful site..

  132. Teja

    I am depositing 90k in october last month in postal ppf,,,will there be any difference in interest as i havent deposited at end of fin year , if so, how to rectify it.

  133. Krishna

    Hi Manish, Your calculator seems to carry forward only principle amounts to next year for interest calculation. For Example person have open account on 1-Apr-2014 and deposited Rs. 1,00,000/- on same day and so interest accumulated for that year is Rs. 8,700/- (assuming 8.7% interest). On 1-Apr-2015 person again deposits Rs. 1,00,000/- so lowest balance for 15-16 months should be Rs. 2,08,700/- right (compound interest)? but your calculator just uses Rs. 2,00,000/-. Can you please clarify my understanding? Thanks Krishna

    • Ravi

      You have to put the “PPF Balance before Financial Year” including intrest then the sheet calculates calculates properly.

      i.e. for the first year the PPF Balance before Financial Year = 0
      then you invest 1,00,000/- which provides you intrest of 8,700/-
      so the balance for next Financial Year must be 1,08,700/-
      you invest 1,00,000/- again then sheet takes proper balance of 2,08,700/- for calculating the intrest.

      Finally, in the illustration Manish told to invest a lumpsum of 60,000/- insted of 5,000/- every month. I would like to mention here, if you can afford only 5,000/- per month then it is better to invest it directly into PPF, instead of keeping that money elsewhere to make it 60,000/- and invest as a lumpsum. Unless you have a better place where you get more interest than PPF. In that case better to invest there itself.

      Remember, as only 5000/- is affordable every month, it will anyway become a 60,000/- plus intrest for next year. which will be more than 60,000/- lumpsum.

  134. Ravi

    Actually it’s better to invest from 1st to 5th of March each year, because the interest for March will be added to the principal and we’ll get interest on the accumulated balance for the entire year.

  135. rengarajan

    now i am paying monthly Rs.1000 in ppf at post office,if i want to change monthly paying amount is it possible or i have to pay Rs 1000 at end of 15th year?
    monthly pay best? or once fixed amt in a year is best in intrest way?
    i have to change monthly pay Rs.1000 to Rs,2000 is it possible ? monthly variation is possible?

  136. Anand Chettri

    Hi Manish,

    Your article has cleared lot of confusion. Thanks :-)
    If i do not have lum sum amount to deposit at once can i go with 12 months RD so that i get some from interest from there and deposit the final amount before 05th April of every year.
    Or shall i deposit the small amounts of 10,000 or so for every month.

  137. atanu pattanayak

    Sir,
    please please explain me if i invest in sbi ppf account on april 1 2015 with a wdeposit 5,000 for every month ,how much can i get at the end of 15 yrs?And if if deposit on april 1 with total of 12 months i.e. 60,000 at a time in the beginning,what will i get?is there any differnce on monthly payment and at a time payement at the beginning?I am looking forward to hearing from you.
    yours faithfully
    Atanu Pattanayak
    kolkata 700137

  138. PARTHASARATHY

    Hi
    If I deposit on 1 of April 2015 RS.100000 I will get 110000 ( assuming 10 %) on 31 march 2016 and again if I deposit 100000 on 1 of April 2016 on which amount the interest for the next year is calculated whether it will be calculated on RS.210000 or on 100000?

  139. PARTHASARATHY

    Sir,Can you also please tell me if I deposit 100000 without fail on 1st April of every year what will the amount I get after 30 years assuming the rate of return 8% if possible what is the formula to calculate.

  140. Abhishek

    Hi

    I have a PPF account but was not depositing amount regularly but I have gone through all your communications & suggestions so now started to deposit 10,000/-PM .

    I want to know after depositing it regularly on monthly basis between 1st to 5th of every month How much would be the maturity amount after 15 years

    Abhishek.

  141. Sridhar

    I have been investing in PPF for 2 years now and completely forgot about the theme “Invest Before 5th of every month”.

    This article is very clear and very informative. Thanks Very much!!!

    Keep posting such good articles that will help billion others.

  142. iyer.sivaram

    Hi Manish,

    I was looking for these details. Thanks for the great posts. I think it would be wise to have an RD for 12 months and then deposit the amount in PPF before April 5th of every year in order to get the best leverage.

  143. satheesh

    Hi Manish,

    Thanks for your wonderful article . I have opened PPF on 30-OCt-2013 and paying amount monthly before 5th of every month..

    I have two questions :

    1. I read only 12 installments in online per year. In my case (started on 30-Oct-2013) will next (30-0ct-2014) will be one year . Please clarify on this

    2. If i want to invest as a whole lump amount before 5th April, In my case when i should invest

  144. B.MITRA

    any extra amount above max. limit deposited in ppf a/c will not earn interest in the concerned financial year.will it earn interest in next F.Y OR NOT IN WHOLE PERIOD OF PPF A/C?

  145. Ranjan

    Hi Manish,

    I have opened the ppf account on 1 Jan 2015.
    Can you please tell me how much amount I can deposit in my account from Jan 2015 to Dec 2015?
    My concern is, whether one year period is count from Apr to Mar or Jan to Dec?

    Thank you,
    Ranjan

  146. Deepak Rinwa

    Hi i have opened my PPF account on 31st Dec 2014 and have deposted 50500 on 1st Jan 2015 then how much interest i will get.

  147. leeladhar

    Hi, am able to download the calculator sheet . but unable to modify the values. its password projected. could you please let e know the solution of it

  148. Arun

    I have a PPF account with a Post Office they refuse to accept the contribution before 1-Apr for the next FY. If I deposit a cheque on 1st Apr it wont be cleared before 5th. Is there a way to make a non-cash contribution before the 5th? If not on this occasion by having a SB account with the same post office and giving a cheque from that account expedite the process?

    • Anand

      A local cheque should get cleared within 2 days. Alternatively, you can transfer the PPF account to SBI so that online transfer can be availed.

      Is your cheque not local?

      • Arun

        Past experience says a contribution done via a local cheque shows up for debit after 7-10 days (probably because of movement delays across POs). Transferring PPF to a bank is a long term solution. I was prepared to make the contribution now also but they are not ready to accept it.

  149. ajay

    how to calculate RATE OF INTEREST of recurring deposit.

    Suppose I’m investing 2500 per month in recurring deposit account for 2 years with rate of interest 8% compounded quarterly. Now I have to find out MATURITY AMOUNT. For this i will use formula :

    ACTUAL AMOUNT (MATURITY AMOUNT) = PRINCIPLE AMOUNT *( (1+RATE/100/4)^(4*2)-1)/(1-(1+RATE/100/4)^(-1/3))

    ACTUAL AMOUNT (MATURITY AMOUNT) = PRINCIPLE AMOUNT *( (1+8/100/4)^(4*2)-1)/(1-(1+8/100/4)^(-1/3))

    ACTUAL AMOUNT (MATURITY AMOUNT) = 65229/-

    ========================

    Now I want to know the FORMULA OF HOW TO CALCULATE RATE OF INTEREST.

    Suppose I’m investing 2500 per month in recurring deposit account interest compounded quarterly. My MATURITY AMOUNT IS 65229/-.
    But i don’t know what INTEREST RATE I HAVE GOT. I want to find out INTEREST RATE . WHAT FORMULA SHOULD I USE TO FIND OUT RATE OF INTEREST

    PLEASE REPLY.

  150. bineet_mehra

    I got interest on PPF acount credited in my account on 31 March 2013(from my Account statement), So i will declare it in ITR of Assessment year 2013-2014, given the fact that Previous year in which this interest was credited is 2012-2013(1 April 2012-31March 2013) ?

  151. sharma ak

    hi, can you explain if i deposit 1 lakh at the end of march e.g. 25march 2015.
    then how much total interest i will get in year 2014-2015?

  152. Subash

    Hi Manish,

    Thanks for your valuable input. It is really helpful. I have 2 queries… I opened a PPF account on 5th April’2014 in SBI bank with a initial deposit of Rs.500….Then during 5th Nov’2014 i have deposited 1,20,000…. Also I have made a deposit of 13000 during 20Mar’2014….My Query is
    1. Whether the last installment 13000 will be accounted for 2014-2015 or else it will be accounted for 2014-2015.
    2. If its true should i have to invest only 137000 on 4th-April’2015 as one time or else can i invest fresh 150000 on 4th April’2015.
    3. Since i opened my account on 5th April’2014…..whether that 1 day will be counted for 2013-2014…

    Kindly suggest ASAP.
    Thanks,
    Subash

    • Subash

      Hi Arun,

      Thanks for ur comment. As per your info the money Rs.13000 which i invested in mid of Mar’14 will be accounted for FY 2014-2015 but there wont be any interest for this money….
      If its true, Then i can invest 1.5L between 1-4 April’15 which will be accounted for FY 2015-2016…
      Pl confirm.

      Thanks,
      Subash

  153. sandeep

    hi,
    I am not receiving the interest as stated. SBI credits only 6.25% and 6.5% pa. I do yearly deposit in the month of Jan or Feb. What ever is the amount before March 31 of previous year along with interest, I get interest of only 6.25 and never 7%. Is there a way out?
    regds,
    sandeep

  154. A.K.S.Bhatia

    My PPF balance forward on 1.4.14 was 956606 ,for the year 2014-15 the interest was 8.7 % pa.Please tell me ,this 956606 will have a simple interest for 12 months or will be compounded on monthly basis .
    Thanks.

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