1. What is a PPF Interest Calculator?

Definition: This calculator estimates the monthly interest earned in a Public Provident Fund (PPF) account based on the minimum balance between the 5th and end of month.

Purpose: It helps investors understand how interest is calculated in their PPF accounts.

2. How Does the Calculator Work?

The calculator uses the formula:

Where:

• Interest — Monthly interest amount ($)
• Min Balance — Lowest balance between 5th and month-end ($)
• i — Annual interest rate (in decimal, e.g., 0.071 for 7.1%)

Explanation: The interest is calculated on the minimum balance between the 5th day of the month and the last day of the month, then divided by 12 for monthly interest.

3. Importance of PPF Interest Calculation

Details: Understanding PPF interest helps in financial planning and maximizing returns from this long-term savings scheme.

4. Using the Calculator

Tips: Enter the minimum balance in your account between the 5th and month-end, and the current PPF interest rate (default 0.071 for 7.1%). All values must be > 0.

5. Frequently Asked Questions (FAQ)

Q1: Why is the minimum balance between 5th and month-end used?
A: PPF rules specify interest is calculated on the lowest balance in this period to prevent interest manipulation.

Q2: What's the current PPF interest rate?
A: As of 2023, it's typically 7.1% (0.071 decimal), but check with your bank for current rates.

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

Q4: When is the best time to deposit in PPF?
A: Before the 5th of April to maximize interest for the financial year.

Q5: Are PPF interest earnings taxable?
A: No, PPF interest is completely tax-free under Indian tax laws.