How Does the PPF Calculator Work?

If you want a risk-free investment, your best bet is government-regulated investments. Such options let you save without worrying about losing money owing to market fluctuations. Besides, banks offer additional benefits like tax rebates and lucrative interest rates against your invested funds.

The most popular Term Deposits provided are the Public Provident Funds. It is a tax-saving scheme that offers assured returns. It is the best choice if you want a long-term investment as it has a lock-in period of 15 years. If you want to calculate the returns, using the PPF calculator is hassle-free. It is an automated tool that is simple to use, involving the following simple steps:

Select appropriate investment frequency

It is an investment vehicle meant to encourage a saving habit. Hence, they come with flexible deposit terms. You can choose the number of deposits you like. This involves monthly, quarterly, half-yearly, and yearly transfers. Evaluating your income, financial goals, and regular expenses is best to make this decision. Check how other variables react to the changes you make for appropriate results.

Enter deposit amount

Like frequency, you also receive flexibility with the investment amount. It ranges between Rs. 500 to Rs. 1.5 lakh. You can select the deposit amount for a financial year. Think about your investment objective and available capital for the period before deciding the right amount. Ideally, a higher amount attracts increased earnings owing to the compounding benefits.

Check interest rates

The tool does more than just calculation. It is a way to compare banks and their offers. This is because they provide the interest rates offered thanks to the PPF calculator. Hence, you receive a clear idea for comparison. This also lets you plan your finances and sets your expectations early on. It also offers accurate results as it is an automated tool.

Select the duration

The minimum lock-in period for PPF Accounts is about 15 years. You can only extend beyond it but not lower. For this, most calculators have a separate extension calculator, while others allow a longer duration. If you are unsure of going the stipulated term, you can opt for 15 years. Upon maturity, extending or reinvesting the funds to continue your investment is easy.

Evaluate results

After entering the mentioned variables, the PPF calculator portrays a detailed calculation. It displays the maturity amount, total deposits, and the total interest earned. You also get a representation of it through an amortization schedule. It lets you get an idea of your upcoming years of staying invested.

It shows both monthly and yearly breakups for easy understanding. Examining these results for better investment planning and PPF returns is best.

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