PPF example
₹1.5 lakh a year in PPF for 20 years
At the current 7.1% rate, ₹1.5 lakh a year in PPF for 20 years grows to about ₹66.58 lakh. You deposit ₹30 lakh; the other ₹36.58 lakh is interest, and all of it is tax-free.
Result
₹66.58 L
Maturity value after 20 years
- Total deposited
- ₹30 L
- Interest earned (tax-free)
- ₹36.58 L
- Same as a monthly deposit of
- ₹12,500
- In today's money (6% inflation)
- ₹20.76 L
From year 18, the interest earned is larger than everything you have deposited.
PPF matures after 15 years. This assumes you extend it in 5-year blocks and keep depositing.
₹1.5 lakh a year at 7.1%, with 5-year extensions
| Tenure | Deposited | Interest | Maturity value |
|---|---|---|---|
| 15 years | ₹22.50 L | ₹18.18 L | ₹40.68 L |
| 20 years | ₹30 L | ₹36.58 L | ₹66.58 L |
| 25 years | ₹37.50 L | ₹65.58 L | ₹1.03 Cr |
Extending the account by 5 years at a time, with deposits, is allowed any number of times after maturity.
If the PPF rate changes
| PPF rate | Maturity value |
|---|---|
| 6.5% | ₹62.02 L |
| 7.1% | ₹66.58 L |
| 7.5% | ₹69.83 L |
| 8% | ₹74.13 L |
The government reviews the PPF rate every quarter. It has ranged from 7.1% to 8.1% since 2016.
Year by year at 7.1%
| Year | Deposited so far | Interest so far | Balance |
|---|---|---|---|
| 1 | ₹1.50 L | ₹10,650 | ₹1.61 L |
| 2 | ₹3 L | ₹32,706 | ₹3.33 L |
| 3 | ₹4.50 L | ₹66,978 | ₹5.17 L |
| 4 | ₹6 L | ₹1.14 L | ₹7.14 L |
| 5 | ₹7.50 L | ₹1.76 L | ₹9.26 L |
| 6 | ₹9 L | ₹2.52 L | ₹11.52 L |
| 7 | ₹10.50 L | ₹3.45 L | ₹13.95 L |
| 8 | ₹12 L | ₹4.54 L | ₹16.54 L |
| 9 | ₹13.50 L | ₹5.82 L | ₹19.32 L |
| 10 | ₹15 L | ₹7.30 L | ₹22.30 L |
| 11 | ₹16.50 L | ₹8.99 L | ₹25.49 L |
| 12 | ₹18 L | ₹10.91 L | ₹28.91 L |
| 13 | ₹19.50 L | ₹13.07 L | ₹32.57 L |
| 14 | ₹21 L | ₹15.49 L | ₹36.49 L |
| 15 | ₹22.50 L | ₹18.18 L | ₹40.68 L |
| 16 | ₹24 L | ₹21.18 L | ₹45.18 L |
| 17 | ₹25.50 L | ₹24.49 L | ₹49.99 L |
| 18 | ₹27 L | ₹28.15 L | ₹55.15 L |
| 19 | ₹28.50 L | ₹32.17 L | ₹60.67 L |
| 20 | ₹30 L | ₹36.58 L | ₹66.58 L |
How this is worked out
PPF interest is calculated monthly on the lowest balance between the 5th and the end of the month, and credited once a year. Depositing ₹1.5 lakh before the 5th of April means it earns interest for all twelve months, so each year the balance grows as (balance + ₹1.5 lakh) × (1 + 7.1%).
Over 20 years that compounding turns ₹30 lakh of deposits into ₹66.58 lakh. The rate is not fixed for the life of the account: whatever rate is notified each quarter applies to the whole balance, so the real outcome will drift from this figure as rates change.
PPF is EEE: deposits up to ₹1.5 lakh a year qualify for the section 80C deduction under the old tax regime, and the interest and maturity amount are tax-free under both regimes. The account is locked for 15 years, with partial withdrawals allowed from the 7th financial year and loans from the 3rd.
Frequently asked questions
Results are estimates for education and planning, not financial advice.
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