How PPF works
The Public Provident Fund is a government-backed savings scheme with a fifteen-year term, extendable in blocks of five years. Interest is credited annually and compounds within the account.
Contributions, interest and maturity proceeds all enjoy favourable tax treatment, which is what makes the headline rate more attractive than it first appears when compared with a taxable deposit.
Points to note
- The interest rate is notified by the government every quarter and has moved several times over the years. This calculator uses whatever rate you enter — confirm the current rate before relying on the projection.
- There is an annual ceiling on how much may be contributed, and a minimum to keep the account active.
- Interest is calculated on the lowest balance between the fifth and the last day of each month, so investing early in the month — and early in the financial year — earns more.
- Partial withdrawals and loans are permitted only after specified years.
Where PPF fits
PPF suits the stable, long-horizon portion of a portfolio — retirement money you will not touch, or a fifteen-year goal. Its lock-in is a genuine constraint, and it is the wrong home for an emergency fund.