What is PPF?
Investment is no longer a thing for rich people only. It has become quite popular among Indians of all age and class. The sole reason behind it is that people are being more mature when it comes to saving money. Now, people spend money in a sustainable way. To encourage such good habits in people, Government of India provides various investment schemes. One of them is Public Provident Fund (PPF). PPF is a long-term investment scheme which you can invest as little as Rs. 500 every year till 15 year.
After PPF maturity, i.e. 15 years, you can withdraw the deposited amount with interest or choose to extend for 5 more years.
By doing so, not only you can save money for you and for your loved ones. But also, you can get tax exemption up to Rs. 1.4 Lacs. Under section 80C and section 10 of the Income Tax Act, 1961, the government provides deduction on the principal deposited amount as well as earned interest.
PPF Interest Rate 2019
The PPF Interest Rate is compounded annually. The government set the interest rate on PPF returns every quarter on the basis of return of government securities. Currently, the PPF interest rate of 2019 is 7.9% annually. As the interest rate on PPF returns is not dependent on stock market performance, the interest rate mostly likely doesn’t t drop by much. With such notion attached to it, PPF is one of the best tax-saving as well as investment schemes in India. You can calculate the interest you will be able to earn at the end of PPF tenure by using PPF Calculator.
What is PPF calculator?
PPF calculator is an online tool through which you can calculate the PPF maturity and interest with ease. PPF calculator is developed to avoid doing math full of hassles. By using PPF calculator, you can easily calculate the interest that you earn by investing in any PPF schemes. The calculation done by PPF calculator is 100% accurate and gives detailed information about PPF maturity, interest that you will earn throughout the PPF tenure, and the principal amount you will get once the tenure period ends. A simple google search can let you use PPF calculator instantly.
How to use PPF Calculator?
You can calculate the various aspects of your Public Provident Fund. If you’re thinking about investing in PPF schemes, you must know how to use PPF Calculator to maximise the benefits. To use the PPF calculator, all you have to provide is these details:–
PPF Account Tenure – The minimum tenure for PPF is 15 years. You can further exceed the tenure by 5 years till 50 years.
Payment Frequency – You can deposit your money in PPF account on 4 basis – monthly, quarterly, half-yearly, and annually.
Deposit Amount – As per your payment frequency, deposit money is the amount that will be deposited by you on fixed date throughout the loan tenure.
Interest Rate – Interest rate is the rate on your investment. Currently, the interest rate on PPF returns is 7.9% annually.
By entering these details, you can easily calculate the earned interest, PPF maturity amount, etc.
Types of PPF Calculators
There are 7 types of PPF Calculators. Each of them has its own purpose. They are -
- PPF Fixed Monthly Investment Calculator – By using this tool, you can easily calculate the payable amount towards PPF on a monthly basis. Enter the month you opened your PPF account, the financial year of opening PPF account, and fixed monthly investments. Submit your details to get complete information on the amount you need to pay on a monthly basis.
- PPF Fixed Yearly Investment Calculator – Calculate the payable amount towards PPF on a yearly basis with PPF Fixed Yearly Investment Calculator. As interest rate on PPF returns keep changing over time, you must calculate how much money you will have to deposit in a year.
- PPF Variable Yearly Investment Calculator – With the help of PPF Variable Yearly Investment Calculator, you can easily calculate the principal amount that you have saved till now. To calculate, you have to provide information like financial year and the amount you have deposited in each financial year.
- PPF Benefits Calculator – This calculator helps you in understanding the various notions of PPF benefits. By entering your PPF details, you can get information on Tax-free income, Income Tax liability before investment, Income Tax liability after investment, Annual Tax savings, and total Tax savings in 15 years.
- PPF Available Loan Calculator – By using this calculator, you can calculate the loan amount you can avail. To know that, all you have to do is to provide your current PPF account balance.
- PPF Available Withdrawal Calculator (Before Extension/After Extension) – A PPF contributor can withdraw the PPF account balance after a certain point of time. This calculator helps you in calculating withdrawal amount before and after the extension. You can make a withdrawal after the seventh financial year.
- PPF Maturity Calculator – Using this calculator, you can calculate when your PPF is matured. By doing so, you can pre-plan to either extend or not finish the PPF investment.
Features & Benefits of PPF calculator
There are various features and benefits of PPF Calculator which are as follow –
- PPF Calculator helps you in calculating the total amount you deposited throughout the loan tenure.
- It also gives you information regarding various aspects of PPF like interest earned, closing balance at the end of the financial year, and more.
- By using the calculator, you can understand when you can avail loan against your PPF account and how much loan you can avail.
- Furthermore, you can also know the amount you can withdraw from your PPF balance and in which year you can do that.
- Last but not the least, you can check the break-up of maturity amount and plan your PPF accordingly.
How does PPF calculator work?
Working of a PPF calculator is pretty complex. It works on a mathematical formula which us commoners can’t comprehend. So, it is better to leave the calculation and working of PF Calculator to experts and start focusing on investing more. For your basic understanding, we are going to discuss how PPF calculator works.
PPF Calculation Formula
A = P(1+r)^t
Where A = PPF Maturity Amount, P = Principal amount that has been invested, R = Rate of interest on PPF, and T = Time period (age of investment)
Furthermore, there are several rules in PPF which you have to follow. These are –
- The maximum amount that can be invested in PPF scheme in a year is Rs. 1.5 Lacs.
- The minimum amount that you can invest in PPF schemes in a year is Rs. 500.
- The interest rate on PPF returns is compounded at the end of the financial year. For maximum benefit, try to deposit the money in PPF scheme before 5 th of every month.
- Finance ministry monitors and regulates the interest rate on PPF every quarter.
In the table given below, we have assumed that you invest Rs. 20,000 every year. By going with current interest rate which is 7.9% per annum, your matured PPF balance will be as follow –
|Investment Period||Total PPF Investment||Total Interest Earned||Maturity Value|
|15 years||₹ 300,000||₹ 281,402||₹ 581,402|
|20 years||₹ 400,000||₹ 576,672||₹ 976,672|
|30 years||₹ 800,000||₹ 4,645,334||₹ 5,445,334|
SBI PPF Account
Being a government bank, SBI has always catered various sorts of financial services to people of India. When it comes to make people save their money for future, SBI, under the government schemes, provides SBI PPF scheme through its various branches. You can deposit up to Rs. 1.5 Lacs in a year with a maximum period of 15 years. You can also opt for a loan against your PPF. Apart from that, when you maintain a PPF account with SBI, you always avail Tax exemption. To open a PPF account in SBI, visit the nearest branch of state bank of India.
How to open PPF Account in SBI?
Opening an SBI PPF account is really an easy task. You can do it through two channels – online and offline. Back in the day, SBI used to open the PPF account of an applicant through offline medium only. After digitisation, SBI has started providing an online service to open an instant PPF account on its website. The process is completely paperless and is also time-saving when compared to offline channel.
Steps on How to Open PPF Account in SBI
- Visit the official website of SBI.
- Login using your user Id and password.
- Locate “New PPF Accounts” and open it.
- Once redirected to “New PPF account” page, verify your personal details.
- Enter your bank account and PAN number. Provide other details of your bank branch.
- Verify every detail and proceed.
- Having done the steps mentioned above, you will be able to successfully open a PPF account for yourself.
- In case, you want to do it for your children, you will have to visit the bank. SBI doesn’t offer an option to open PPF account for minor through its website.
Who Can Open A PPF account?
- Those who are resident of India and are above 18 years can open a PPF account. You can open only one PPF account in your name.
- It can be opened in the name of minor. Minor should be your child. In case parents are passed away, grandparents can also open a PPF account for their grandchildren.
- Non-residents of India won’t be able to open a PPF account.
PPF Withdrawal Rules
- Maturity of PPF account occurs after completion of 15 years from the day the account was opened.
- Once matured, the entire PPF amount can be withdrawn.
- After the end of 6 th financial year of investment, one can withdraw partial amount from PPF account. To check the withdrawal limit, use PPF Calculator. It carefully examines your every detail related to PPF account and then let you know at what time you can withdraw partial funds from your PPF account.
- You can also avail loan against your PPF balance.
Alternatives of Public Provident Fund (PPF)
- ELSS Funds
- National Savings Certificate (NSC)
- Unit Linked Insurance Plan (ULIP)
- Sukanya Samriddhi Yojana (SSY)
- National Pension System (NPS)
How to Transfer a PPF Account?
If you have an existing PPF account in either bank or post office and facing a problem for depositing money, you should think about transferring your PPF account to desired bank or post office. As you can’t make an online payment for your PPF account in post office, you should transfer it to bank for much convenient process.
Below, we have mentioned few steps on how to transfer a PPF Account.
For transferring your PPF Account to different branch of bank or post office
Step 1 – Visit your branch.
Step 2 – Ask for a form as per your concern.
Step 3 – Fill it and submit it.
Within seven days, the branch of the post office or bank will be changed.
For transferring your PPF Account to different bank or post office
Step 1 – Make a visit to your existing bank/post office with your PPF passbook.
Step 2 – Submit a transfer application request. You will have to fill the complete address of the bank/post office you want to transfer your PPF account.
Step 3 – Your existing PPF account details will be sent to the new bank/post office that you opted for.
Step 4 – Once they get your details, they will ask you to submit the receipts of your documents.
Step 5 – In the new institution, you will have to submit a fresh account opening form.
Step 6 – Attach your photographs and copies of PAN Card, Aadhar Card, Voter’s ID Card. You have to do this as some banks/post office ask you to re-submit your KYC details.
Once done with the steps mentioned above, you will have to wait for 1 month to be able to get your PPF account transferred to the new bank/post office.
Frequently Asked Questions on PPF
Q) What are recent PPF interest rates?
Ans) Currently, the PPF interest rate is 7.9% annually. Government decided the interest rate they are going to pay on PPF amount every quarter. To avail maximum benefits, we advise you to make a deposit in your PPF account before 5 th of every month. The interest rate on PPF is compounded every year.
Q) How much I will get in PPF after 15 years?
Ans) For this, you must check the PPF calculator that can be found quite easily with a simple google search. Usually, you get the deposited money and interest on it that is compounded every year.
Q) Which bank is best for PPF?
Ans) Most of the Indian banks are great for PPF account. For less hassles, you may choose from one of these banks – PNB, SBI, BOB, and ICICI. You can also choose to open your PPF account from the nearest post office to your house/office.
Q) Which is better PPF or FD?
Ans) As both of them are different in nature, choosing a better investment scheme is up to you. If you want to invest a big amount and want quick returns, you should choose FD. Usually, you get 8- 9% interest rate annually on Bank FD.
Q) Is PPF Taxable in India?
Ans) No, as per the government guidelines, Public Provident Fund (PPF) isn’t taxable in India. You can save up to Rs. 1.5 Lacs on Tax by investing your money in PPF account.
Q) Can I deposit more than 1.5 Lakh in PPF?
Ans) No, you cannot deposit more than 1.5 Lakh in PPF in a year. You can opt for FD if you want to invest your money and want tax exemption.
Q) Can a person have 2 PPF accounts?
Ans) As per the government guidelines, one just cannot have two PPF accounts in his/her name. Even if you’re doing it for your children, you won’t be able to open two PPF account in your name. To invest more in lucrative schemes, you can opt for opening a SIP account with Afinoz.