A Public Provident Fund account is one of the few investments in India where the return is fixed, government-backed, and completely tax-free at every stage — money in, interest earned, and money out. That combination makes it a permanent fixture in most long-term financial plans, but the 15-year lock-in also makes it easy to lose track of what an account is actually worth at maturity, especially once step-up deposits, partial withdrawals, or an extension enter the picture.
This guide walks through the exact formula behind a PPF maturity calculation, works through full examples using the current interest rate, and explains what changes once the 15-year term ends.
How PPF Interest Is Actually Calculated
PPF does not work like a fixed deposit that simply applies one rate to one balance at the end of the year. Interest is calculated every month on the lowest balance in the account between the 5th and the last day of that month, but it is only credited to the account once, at the end of the financial year. That single rule has a very practical consequence: a deposit made on the 2nd of a month earns interest for that entire month, while the same deposit made on the 10th earns nothing for that month, because the balance used for the calculation is the lower opening-of-window figure from the 5th.
The interest rate itself is set by the Ministry of Finance every quarter and has held at 7.1% per annum for FY 2026-27, compounded annually. Because it is reviewed quarterly, the rate used in any calculator or manual calculation should always be checked against the current government notification before relying on it for a real decision.
The PPF Maturity Value Formula
Because PPF is designed around a fixed yearly (or effectively yearly, once monthly deposits are summed) contribution compounding annually, the maturity value can be estimated with the standard annuity-due compound interest formula:
M = (P ÷ i) × [(1 + i)n − 1] × (1 + i)
Where M is the maturity value, P is the amount invested each year, i is the annual interest rate as a decimal (7.1% = 0.071), and n is the number of years. The extra (1 + i) at the end accounts for deposits effectively earning interest from early in the year rather than at the very end — which is why depositing early in the financial year, and before the 5th of each month, consistently produces a slightly higher maturity value than depositing the same total amount later.
This is the same compounding formula behind the site’s Compound Interest Calculator; a PPF account is, mechanically, an annually compounding recurring investment, so the same tool can be used to model the maturity value at any contribution amount, rate, or tenure by treating each year’s deposit as a fresh addition to the compounding principal.
Worked Example: Investing the Full ₹1.5 Lakh a Year for 15 Years
The PPF annual contribution limit is ₹1,50,000, and it also happens to be the ceiling for the Section 80C deduction (Section 123 under the new Income Tax Act, 2025, for taxpayers still on the old tax regime). Here is how a full ₹1,50,000-a-year deposit grows at 7.1%, compounded annually, over the 15-year term:
| End of year | Total invested | Maturity value at that point | Interest earned so far |
|---|---|---|---|
| Year 1 | ₹1,50,000 | ₹1,60,650 | ₹10,650 |
| Year 5 | ₹7,50,000 | ₹9,25,701 | ₹1,75,701 |
| Year 10 | ₹15,00,000 | ₹22,30,122 | ₹7,30,122 |
| Year 15 (maturity) | ₹22,50,000 | ₹40,68,209 | ₹18,18,209 |
Two things stand out. First, the account crosses the halfway point of its final value only after year 10 — the last five years of a PPF term contribute a disproportionately large share of the final corpus, purely from compounding on an already-large balance. Second, out of the final ₹40.68 lakh, exactly ₹22.5 lakh (55%) came from actual deposits and ₹18.18 lakh (45%) was interest — money the investor never had to put in.
Worked Example: A Smaller, More Common Monthly Deposit
Not every investor can commit the full ₹1,50,000 a year. Depositing ₹5,000 a month (₹60,000 a year) for the same 15-year term, at the same 7.1% rate, scales down proportionally:
| Total invested over 15 years | Maturity value | Interest earned |
|---|---|---|
| ₹9,00,000 | ₹16,27,283 | ₹7,27,283 |
The interest still makes up nearly 45% of the final amount, because the ratio between deposits and compounding is unaffected by the size of the yearly contribution — only the rate and the number of years change that ratio.
Why the Deposit Date Inside the Month Actually Matters
Because interest is calculated on the lowest balance between the 5th and the last day of the month, someone depositing ₹12,500 every month on the 3rd earns a full 12 months of interest on each deposit in its first year. The same person depositing the identical ₹12,500 on the 10th of each month instead loses one month of interest on every single deposit, every year, for 15 years. On a ₹1,50,000-a-year plan, consistently depositing after the 5th instead of before it can reduce the final maturity value by roughly ₹35,000–₹45,000 over the full term — a gap created entirely by timing, with no difference in the amount invested.
What Happens After the 15-Year Term Ends
A PPF account does not have to be closed at maturity. It can be extended indefinitely in blocks of five years, and the extension can take one of two forms:
Extension with further contributions: Form H must be submitted within one year of the maturity date to keep depositing into the account. The ₹1,50,000 annual limit and Section 80C benefit continue to apply, and withdrawals during this type of extension are capped at 60% of the balance held at the start of that five-year block, spread across the block however the account holder chooses.
Extension without further contributions: If Form H is not filed, the account automatically continues on a no-deposit basis. No further money can be added, but the existing balance keeps earning the prevailing PPF rate, compounded annually, and the account holder may make one withdrawal of any amount, in any single financial year, with no 60% cap. This option is commonly used to draw a tax-free income stream in retirement.
One detail worth flagging: any money deposited into a matured account without a filed Form H does not earn interest and is treated as an irregular deposit — an expensive and entirely avoidable mistake if the extension paperwork is overlooked.
PPF vs RD vs SIP: Where It Fits in a Savings Plan
PPF is frequently compared with a recurring deposit or a mutual fund SIP, but the three serve different purposes:
| PPF | Recurring Deposit | Equity SIP | |
|---|---|---|---|
| Return | Fixed, ~7.1% (government-set) | Fixed, bank-set, usually 6-7.5% | Market-linked, historically higher but variable |
| Risk | None (sovereign-backed) | Very low (bank/DICGC insured up to limits) | Market risk, can lose value short-term |
| Lock-in | 15 years (partial withdrawal from year 7) | Chosen tenure, usually short-term | None, but discouraged short-term |
| Taxation | Fully tax-free (EEE) | Interest taxed at slab rate | Capital gains tax on withdrawal |
In practice, PPF works best as the guaranteed, tax-free core of a long-term or retirement plan, while an RD suits short-term, capital-safe goals and a SIP is better suited to long-term growth where some volatility is acceptable. For a closer look at how a recurring deposit and a SIP compare directly, see RD vs SIP: Which Should You Choose for Your Savings Goal?, and for the mechanics of compounding that both PPF and RD rely on, see How Compound Interest Works: The Rule of 72 and What It Means for Your Money.
Tips to Get the Most Out of a PPF Account
- Deposit before the 5th of the month, every month, to make sure that month’s balance counts toward interest.
- Where possible, deposit the full year’s contribution as a lump sum between April 1 and April 5 — this earns a full 12 months of interest on the entire amount instead of a partial-year average.
- Never let the balance drop below the ₹500-a-year minimum contribution; missing it makes the account inactive and it must be reactivated with a penalty before it earns interest again.
- Decide on the extension type (with or without contributions) before the one-year Form H deadline after maturity, since missing it forces a no-deposit extension for that entire five-year block.
- Model different contribution amounts and rates with the Compound Interest Calculator before committing to a 15-year plan, since even a 0.5-percentage-point rate change compounds into a meaningfully different maturity value over a long tenure.
Frequently Asked Questions
What is the current PPF interest rate for FY 2026-27?
The rate has been set at 7.1% per annum, compounded annually, and is reviewed by the Ministry of Finance every quarter. Always confirm the rate for the current quarter before using it in a maturity calculation, since it can change.
How is interest calculated if I deposit different amounts on different dates each month?
Interest for a given month is calculated on the lowest balance in the account between the 5th and the last day of that month. Any deposit made after the 5th does not count toward that month’s interest calculation, even though it is still added to the principal for future months.
Can I extend my PPF account after 15 years, and do I have to keep contributing?
Yes. The account can be extended indefinitely in five-year blocks. Filing Form H within one year of maturity allows further contributions and keeps the Section 80C benefit; not filing it converts the extension to a no-deposit block, where the balance still earns interest and one withdrawal per year is allowed with no cap.
Is the PPF maturity amount taxable?
No. PPF has EEE (exempt-exempt-exempt) status — the contribution, the interest earned every year, and the final maturity amount are all exempt from income tax under current rules.
What are the minimum and maximum amounts I can invest in PPF each year?
The minimum is ₹500 per financial year and the maximum is ₹1,50,000 per financial year, across all PPF accounts held in an individual’s own name.
Can I withdraw money from PPF before the 15-year term ends?
Partial withdrawal is allowed starting from the 7th financial year, subject to a limit based on the balance at the end of the 4th preceding year or the immediately preceding year, whichever is lower. Premature closure of the entire account is allowed only in specific circumstances, such as medical treatment or higher education, and comes with a reduced interest rate as a penalty.
How to Calculate Your Own PPF Maturity Value
CheckMatter does not yet have a dedicated PPF-only calculator, but the Compound Interest Calculator uses the exact same annual-compounding math a PPF account runs on. Enter the planned yearly deposit as the principal added each period, 7.1% (or the current quarter’s rate) as the interest rate, annual compounding, and the number of years remaining until maturity or the end of an extension block, to see the projected value at any point in the term.
Written and maintained by Ajit Naskar.
Independent professional review is not claimed. Finance and tax examples remain educational estimates unless a named qualified reviewer is shown.
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Prefer a market-linked option alongside PPF? See our NPS Calculator guide, which walks through the same kind of worked examples for NPS — including the new 2026 rules on how much of your NPS corpus you can actually withdraw tax-free at retirement.