1. What is a PPF Yearly Interest Calculator?

Definition: This calculator computes the yearly interest earned on a Public Provident Fund (PPF) account based on the minimum balance and current interest rate.

Purpose: It helps investors estimate their annual PPF interest earnings for financial planning.

2. How Does the Calculator Work?

The calculator uses the formula:

Where:

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

Explanation: The interest is calculated on the lowest balance between the 5th and last day of each month.

3. Importance of PPF Interest Calculation

Details: Accurate interest calculation helps in tax planning and understanding the growth of this long-term savings instrument.

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 minimum balance determined for PPF?
A: It's the lowest balance between the 5th day and last day of each month throughout the financial year.

Q2: What's the current PPF interest rate?
A: As of 2023, it's typically 7.1% (0.071 decimal), but this may change quarterly.

Q3: Is PPF interest compounded yearly?
A: Yes, interest is calculated yearly and compounded annually.

Q4: Is the interest taxable?
A: PPF interest is completely tax-free under Section 10 of the Income Tax Act.

Q5: When is the interest credited?
A: PPF interest is credited at the end of each financial year (March 31).