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: Helps investors understand how interest is calculated monthly on their PPF investments.

2. How Does the Calculator Work?

The calculator uses the formula:

Where:

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

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

3. Importance of PPF Interest Calculation

Details: Understanding PPF interest helps in financial planning and comparing returns with other investment options.

4. Using the Calculator

Tips: Enter the minimum balance in dollars and the current PPF interest rate (default 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 between the 5th and last day of each month.

Q2: When is PPF interest credited?
A: Interest is calculated monthly but credited annually at the end of each financial year.

Q3: Is PPF interest compounded?
A: Yes, the interest is compounded annually and added to the principal.

Q4: Can the PPF interest rate change?
A: Yes, the government reviews and announces the rate quarterly.

Q5: Is PPF interest taxable?
A: No, PPF interest is completely tax-free under Section 10 of the Income Tax Act.