1. What is PPF Interest Calculation?

Definition: This calculator determines the monthly interest earned on a Public Provident Fund (PPF) account based on the minimum balance and current interest rate.

Purpose: It helps investors understand how interest is calculated on their PPF investments and plan their savings accordingly.

2. How Does the Calculator Work?

The calculator uses the formula:

Where:

• Interest — Monthly interest amount ($)
• Min Balance — Minimum balance in the account during the month ($)
• i — Annual interest rate (in decimal form, e.g., 0.071 for 7.1%)

Explanation: The annual interest rate is divided by 12 to get the monthly rate, which is then applied to the minimum balance.

3. Importance of PPF Interest Calculation

Details: Understanding PPF interest helps in financial planning, comparing investment options, and projecting long-term savings growth.

4. Using the Calculator

Tips: Enter the minimum balance in dollars and the current PPF interest rate in decimal form (default 0.071 for 7.1%). All values must be > 0.

5. Frequently Asked Questions (FAQ)

Q1: How is minimum balance determined for PPF?
A: It's the lowest balance in your account between the 5th and last day of each month.

Q2: What's the current PPF interest rate?
A: As of 2023, it's typically 7.1% (0.071 decimal), but this changes quarterly based on government announcements.

Q3: Is PPF interest compounded?
A: Yes, interest is compounded annually but calculated monthly.

Q4: When is interest credited to PPF accounts?
A: Interest is calculated monthly but credited to the account at the end of each financial year.

Q5: Are there tax benefits on PPF interest?
A: Yes, PPF interest is completely tax-free under Section 80C of the Income Tax Act.