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CalcHub Blog
March 28, 20265 min read

How to Calculate PPF Maturity Amount — Formula & Example

Learn how to calculate your PPF maturity amount with the exact formula, year-by-year interest calculation, and extension rules. Includes worked examples.

ppf public provident fund investment india calchub finance
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The Public Provident Fund (PPF) is one of India's most popular tax-saving instruments — backed by the government, offering tax-free returns, and compounding over 15 years. But how much will you actually have at maturity? The answer depends on how much you deposit, when you deposit each year, and the prevailing interest rate.

Here's the step-by-step calculation. You can also use the CalcHub PPF calculator for instant results.

PPF Basics

  • Minimum annual deposit: Rs 500
  • Maximum annual deposit: Rs 1,50,000
  • Lock-in period: 15 years (partial withdrawal after 7th year)
  • Interest rate: Set by the government quarterly (currently 7.1% for FY 2025-26)
  • Compounding: Annual
  • Tax benefit: EEE — Exempt at investment (80C), Exempt during growth, Exempt at maturity

The PPF Interest Calculation Rule

PPF interest is calculated on the lowest balance between the 5th and the last day of each month. This means:

  • Deposits made between the 1st and 5th of a month earn interest for that month
  • Deposits made after the 5th earn interest only from the next month
This is why financial advisors recommend depositing before the 5th of April each year — your money earns interest for 12 months instead of 11 or fewer.

The Maturity Formula

For a fixed annual deposit made at the start of each year:

Maturity = P × [((1 + r)^n - 1) / r] × (1 + r)

Where:


  • P = Annual deposit

  • r = Annual interest rate (as decimal)

  • n = Number of years (15)


Worked Example: Rs 1,50,000 Per Year

Annual deposit: Rs 1,50,000 (maximum) Interest rate: 7.1% Tenure: 15 years 
P = 1,50,000
r = 0.071
n = 15


Maturity = 1,50,000 × [((1.071)^15 - 1) / 0.071] × 1.071
= 1,50,000 × [(2.7590 - 1) / 0.071] × 1.071
= 1,50,000 × [1.7590 / 0.071] × 1.071
= 1,50,000 × 24.7747 × 1.071
= 1,50,000 × 26.5337
= Rs 39,80,055

Total deposited: Rs 1,50,000 × 15 = Rs 22,50,000 Interest earned: Rs 39,80,055 - Rs 22,50,000 = Rs 17,30,055 Tax on maturity: Rs 0 (EEE status)

Your money nearly doubles — and the entire Rs 39.8 lakhs is tax-free.

Year-by-Year Growth (First 5 Years)

YearOpening BalanceDepositInterestClosing Balance
101,50,00010,6501,60,650
21,60,6501,50,00022,0573,32,707
33,32,7071,50,00034,2725,16,979
45,16,9791,50,00047,3567,14,335
57,14,3351,50,00061,3789,25,713
Notice how interest grows each year — from Rs 10,650 in year 1 to Rs 61,378 in year 5. This acceleration continues, with the final years generating the most interest.

Extension After 15 Years

After maturity, you can extend your PPF in blocks of 5 years — with or without additional deposits:

  • With deposits: Continue investing up to Rs 1,50,000/year and earn interest on the growing balance. Tax benefits under 80C continue.
  • Without deposits: Don't invest anything new, but the existing balance continues earning interest. This is essentially risk-free compounding.

Practical Tips

1. Deposit early in the financial year. Depositing Rs 1,50,000 on April 1st (or before April 5th) earns 12 months of interest. Depositing on March 31st earns zero interest for that year. The timing difference over 15 years can mean Rs 1-2 lakhs more at maturity. 2. If you can't deposit lumpsum, deposit monthly before the 5th. Split Rs 1,50,000 into Rs 12,500/month and deposit before the 5th of each month to maximize interest. 3. Compare PPF with ELSS. PPF gives guaranteed 7.1% tax-free returns. ELSS (equity mutual funds) have historically returned 12-15% but with market risk and a shorter 3-year lock-in. For the risk-averse portion of your 80C investments, PPF is hard to beat.

Can PPF interest rate change during my 15-year term?

Yes. The government revises PPF interest rates quarterly. Your existing balance earns whatever the current rate is — there's no rate lock for the entire 15-year period. However, PPF rates have historically stayed between 7-8.7%, so the variation is moderate.

Can I withdraw before 15 years?

Partial withdrawal is allowed from the 7th financial year onwards. You can withdraw up to 50% of the balance at the end of the 4th year or the preceding year, whichever is lower. Full premature closure is allowed only in specific cases (serious illness, higher education, NRI status change) after 5 years.

Is PPF better than FD for tax saving?

Almost always. PPF offers EEE tax status (no tax at any stage), while FD interest is fully taxable at your slab rate. A 7.1% PPF return equals approximately 10% pre-tax return for someone in the 30% tax bracket.

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