Everyone tells you to invest in PPF. Almost nobody shows you the actual numbers. This article does exactly that — with a free PPF calculator so you can plug in your own amounts and see your exact maturity value, Section 80C savings, and partial withdrawal eligibility.
The 80C deduction is the hidden multiplier most people ignore. Every ₹1.5L you deposit saves you ₹45,000 in tax (at 30% slab). Over 15 years that's ₹6.75 lakhs of tax you never paid. Factor that in and your effective cost of the investment is only ₹15.75 lakhs — not ₹22.5 lakhs. The effective post-tax return jumps to over 10%.
Change the deposit amount, rate, and years. See maturity value, tax savings, and withdrawal eligibility instantly.
Open PPF Calculator →PPF has EEE status — Exempt, Exempt, Exempt. This is the only triple exemption available to retail investors in India:
Compare this with a bank FD at the same 7% rate. A person in the 30% slab pays 30% tax on FD interest every year. The effective post-tax FD return is 4.9%. PPF at 7.1% beats a 7% FD by 2.2 percentage points — guaranteed, every year.
PPF interest is calculated on the minimum balance between the 5th and last day of each month. If you deposit ₹1.5L on April 10th, you lose one full month of interest — that's ₹887 gone. Deposit before April 5th every year. Over 15 years this discipline adds roughly ₹50,000–70,000 to your corpus at no extra cost.
| Feature | PPF | Bank FD | ELSS |
|---|---|---|---|
| Returns | 7.1% guaranteed | 6.5–7.5% | 10–15% (market) |
| Lock-in | 15 years | 5 years (80C FD) | 3 years |
| Tax on returns | Zero | At slab rate | 10% LTCG above ₹1L |
| 80C benefit | Yes (₹1.5L) | Yes (₹1.5L) | Yes (₹1.5L) |
| Risk | Zero (govt backed) | Very low | Market risk |
| Effective post-tax return (30% slab) | ~7.1% | ~4.9% | ~11–13%* |
| Partial withdrawal | Year 7 onwards | Penalty applies | After 3 years |
*ELSS returns are not guaranteed and depend on market performance
The correct strategy for most salaried Indians: max out PPF every year for the guaranteed tax-free base, and invest any surplus above ₹1.5L in equity mutual funds (ELSS or index funds) for long-term wealth creation above inflation. PPF and equity are not competitors — they serve different roles in a portfolio.
The most important thing to understand about PPF is that the growth is back-loaded. The first 7–8 years feel slow. The last 5 years are where the magic happens.
Notice what happens at Year 10: the interest earned each year (₹1.37L) almost equals the annual deposit of ₹1.5L. By Year 13, the annual interest exceeds ₹2L — more than the deposit. The account is now growing faster on its own momentum than from your contributions. This is why extending beyond 15 years — even without depositing more — is often the smartest move.
At maturity you have two choices. Close the account and take the ₹40.68L tax-free. Or extend in 5-year blocks.
If you extend with continued deposits of ₹1.5L/year for another 5 years, your corpus at Year 20 is approximately ₹66.58 lakhs. That's ₹25.9L more than closing at 15 years — from just ₹7.5L of additional deposits. The extra ₹18.4L is pure compounding on a large base.
If you extend without any deposits (just let the corpus sit and earn interest), the ₹40.68L grows to approximately ₹57.6L in 5 more years at 7.1% — with zero additional investment from you.
To extend with contributions, submit Form H within one year of maturity. Extensions happen in 5-year blocks only — 5, 10, 15, or 20 additional years. If you miss the one-year window, you can still extend but only without contributions (corpus earns interest, one withdrawal per year allowed).
PPF is long-term by design but it's not completely illiquid. From Year 7 onwards you can make one partial withdrawal per financial year. The maximum you can withdraw is 50% of the balance at the end of Year 4 or 50% of the balance at the end of the previous year — whichever is lower.
On a ₹1.5L/year deposit, by Year 7 you can typically withdraw up to ₹4.43L — completely tax-free. This is the PPF emergency fund: locked away earning good returns, but accessible when genuinely needed.
Our PPF calculator shows exact partial withdrawal and loan amounts based on your deposit history.
Calculate Withdrawal Limits →This is the question everyone asks. Here's the honest answer.
At 7.1% guaranteed, PPF on ₹1.5L/year gives you ₹40.68L in 15 years — zero risk, zero tax. A ₹12,500/month SIP (same ₹1.5L annual amount) in a diversified equity fund at 12% CAGR gives you approximately ₹62.7L in 15 years — but with market volatility and 10% LTCG tax on gains above ₹1L annually.
The SIP builds more wealth in good markets. The PPF is the floor — it guarantees you won't end up with less than expected regardless of what markets do. The optimal strategy for most people is both: PPF as the guaranteed foundation, equity SIP as the wealth accelerator above it.