1. What is an Interest On PPF Calculator?

Definition: This calculator computes 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 much interest they can expect to earn each month on their PPF investments.

2. How Does the Calculator Work?

The calculator uses the formula:

Where:

• \( \text{Interest} \) — Monthly interest earned ($)
• \( \text{Min Balance} \) — 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 multiplied by the minimum balance to calculate the interest earned that month.

3. Importance of PPF Interest Calculation

Details: Understanding monthly interest helps with financial planning, comparing investment options, and tracking PPF account 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 the minimum balance determined?
A: For PPF, interest is calculated on the lowest balance 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, PPF interest is compounded annually but calculated monthly based on the minimum balance.

Q4: Are there tax benefits for PPF?
A: Yes, PPF falls under EEE category - contributions, interest, and maturity amounts are all tax-exempt.

Q5: What's the investment period for PPF?
A: The standard tenure is 15 years, extendable in blocks of 5 years.