1. What is a Monthly PPF Interest Calculator?

Definition: This calculator estimates 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 their PPF account generates each month.

2. How Does the Calculator Work?

The calculator uses the formula:

Where:

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

Explanation: The annual interest is calculated by multiplying the minimum balance by the interest rate, then divided by 12 to get the monthly amount.

3. Importance of PPF Interest Calculation

Details: Understanding monthly interest helps with financial planning and assessing the growth of your PPF investments over time.

4. Using the Calculator

Tips: Enter your minimum account 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 check with your bank for current rates.

Q3: Is PPF interest compounded?
A: Yes, interest is compounded annually but credited at the end of each financial year.

Q4: Why divide by 12 in the formula?
A: This converts the annual interest rate into a monthly equivalent.

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