What is PPF Calculator?
With the helpful PPF amount calculator, you can easily calculate the maturity amount of your investment, as well as interest earned on that investment. It is extremely helpful to stay on top of the growth of the investment with the guidance of the PPF amount calculator.
Investing in a pension plan can be a very complicated business. Most of us have trouble with complex calculations to determine what the maturity amount is. If you are planning to invest in a pension plan and you are not sure how much to invest or what return you might get, using an online calculator might be a good idea for you.
How PPF Calculator Works?
Using a PPF calculator is an easy and straightforward process that involves calculating the return and interest earned on one’s investment based on the mathematical formula. Most calculators have a very user-friendly interface, so it is very simple to use them. For anyone who is new to using online calculators, the following step-by-step tutorial will help you understand how to use a PPF interest calculator: –
Step 1: Click on the PPF calculator of your choice to begin.
Step 2: Provide all the requested information, including the amount and interest rate for your initial investment.
Step 3: Upon completing the process, the maturity amount will appear on the screen.
The interest earned will be calculated on the basis of the financial year if the deposit is made on the first of April.
Public Provident Fund Calculation Formula
PPF return calculator uses the compound interest formula to calculate the interest earned on the investment and the amount that will be received upon maturity of the investment. Below is the formula used to calculate PPF return:
F = P[({(1 + i)n} – 1)/i]
Here,
Interest rate = i
Amount of maturity = F
Years since investment was made = N
Invested principal amount (yearly) = P
Taking an example, in order to get a clear understanding of how this formula works, let’s look at an example. If you were to deposit 1 lakh rupees every year for a period of 15 years at a rate of 7% for those 15 years, the maturity amount at the end of the PPF tenure would be Rs. 28.82 lakh, and that is how it works.
The benefits of investing in a PPF plan
Here are some benefits and features of the PPF scheme:
1. Tenure can be extended indefinitely
PPF is a government-backed investment scheme that ensures the safety and security of your money. Investors often opt for this investment scheme if they want a guaranteed return.
2. Partial withdrawals and loans against PPF:
Subscribers to the PPF scheme are able to take loans against their account at a reasonable interest rate. It is extremely advantageous for investors who want to take short-term loans without pledging collateral. This benefit is available from the third to sixth year after opening the account. PPFs are long-term investments with a 5-year lock-in period, although partial withdrawals can be made after that. In times of financial difficulty, these options can be helpful.
3. Amounts of investment that are flexible
With a minimum investment of Rs. 500 a year, anyone living in India can open a PPF account and begin investing. This amount can also be up to Rs. 1.5 lakh a year. This makes PPF a flexible investment option for individuals of different financial means.
4. Compounding power
It has a 30-year maturity period and the interest is compounded annually according to the declared rate of interest. Since PPF subscribers stay invested for a long period of time, they are in a good position to take advantage of compound interest.
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