CalcKitThe Public Provident Fund (PPF) is one of India's most popular long-term savings schemes: government-backed, with a 15-year lock-in and tax-free maturity. But the maturity figure on a calculator can look like magic until you see the maths behind it. The good news is that the calculation uses just three inputs — how much you deposit each year, the annual interest rate, and the number of years — and one fixed formula.
The PPF maturity formula
PPF interest compounds once a year, and each year's deposit is assumed to be made at the start of the year, so it earns interest for the full year. That gives the future value of an annuity-due formula:
Maturity = P × [((1 + i)n − 1) ÷ i] × (1 + i)
Here P is your yearly deposit, i is the annual interest rate as a decimal, and n is the number of years. The bracketed part grows each year's deposit with compound interest; the final (1 + i) multiplier accounts for deposits being made at the start of each year. You can deposit up to ₹1,50,000 per financial year, with a minimum of ₹500 to keep the account active — check current rates before relying on any figure, because the government revises the PPF rate periodically.
Worked example: ₹1,50,000 a year for 15 years
Take the maximum yearly deposit, ₹1,50,000, held for the full 15-year term. Using an illustrative annual rate of 7% (an example only — check current rates, as the prevailing rate may differ), the formula gives: maturity = 1,50,000 × [((1.07)15 − 1) ÷ 0.07] × 1.07 = ₹40,33,208. Your total deposits over 15 years are 15 × ₹1,50,000 = ₹22,50,000, so the interest earned is ₹40,33,208 − ₹22,50,000 = ₹17,83,208. Nearly 44% of the final amount is interest — that is the power of 15 years of compounding. Try your own deposit and term in our free PPF Calculator, which also models 20- and 25-year extensions.
The April 5 timing trick
PPF interest is calculated on the lowest balance in your account between the 5th and the last day of each month. In practice this means a deposit made before April 5 earns interest for the entire financial year, while the same deposit made later in the year earns less. If you can manage it, depositing a lump sum early in April beats spreading the same amount across twelve monthly deposits — the opposite of a SIP, where monthly investing is the whole point. Over 15 years, that early-deposit habit adds up to a visibly larger maturity amount.
The 15-year lock-in and extensions
A PPF account matures after 15 financial years, and you cannot withdraw the full balance before then (partial withdrawals are allowed only from the seventh year, under conditions). At maturity you have three choices: withdraw everything tax-free, extend in blocks of 5 years with fresh deposits, or extend in 5-year blocks without new deposits and keep earning interest on the balance. Extending is where the numbers get dramatic — five extra years of compounding on a large balance can add more interest than the first several years combined, which is why many savers extend rather than cash out.
Common mistakes that shrink your maturity amount
First, depositing late in the financial year, as above — you lose months of interest every year. Second, assuming the rate never changes: the formula works with whatever rate applies, but if the government revises the rate during your 15 years, your actual maturity will differ from a single-rate projection. Third, treating PPF like a flexible savings account: missed years still count toward the 15-year term, but you deposit less, so compounding has less to work with. Fourth, forgetting the yearly cap — deposits above ₹1,50,000 in a year do not earn interest or tax benefits. Keep deposits regular, early, and within the limit, and let the formula do the rest.