1. What is a PPF Account 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 will generate 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 rate is divided by 12 to get the monthly rate, which is then multiplied by the account balance.

3. Importance of PPF Interest Calculation

Details: Understanding your expected interest helps with financial planning and comparing PPF with other investment options.

4. Using the Calculator

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

5. Frequently Asked Questions (FAQ)

Q1: How is PPF interest calculated in reality?
A: PPF interest is calculated monthly but credited annually. The calculation uses 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: Why divide by 12 in the formula?
A: The division converts the annual interest rate to a monthly rate since we're calculating monthly interest.

Q4: Is PPF interest compounded?
A: Yes, interest is compounded annually but calculated monthly as shown in this calculator.

Q5: Are there tax benefits on PPF interest?
A: Yes, PPF interest is tax-exempt under Section 10 of the Income Tax Act.