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LIC PPF Calculator

₹
Yr
Rate of interest p.a
7.1%
Total invested₹ 75,000
Total interest₹ 60,607
Maturity value₹ 1,35,607
Invested amountTotal returns

The LIC PPF calculator is a financial tool that simplifies the process of calculating returns and PPF interest. It takes into account a 15-year tenure and the prevailing interest rate to calculate returns.

PPF is a popular long-term savings and investment scheme offered by the Indian government. The scheme aims to help individuals build a secure financial future. Contributors can save up to 1.5 lakhs every financial year, with an interest rate set by the government and a lock-in period of 15 years.

How the Koshex LIC PPF Calculator Works:

The PPF calculator operates based on the following formula:

M = P [(1 + i)^n - 1) / i] x (1 + i)

Where:

M is the maturity amount
P is the annual contribution
i is the annual rate of interest
n is the number of years

Example:

To illustrate the formula, let's consider an example. You plan to invest ₹1,00,000 annually in PPF. The current PPF interest rate is 7.1%, and the lock-in period is 15 years. Here's how the values fit into the formula:

Converting the interest rate, i = 7.1/100 = 0.071

M = 1,00,000 x [(1 + 0.071)^15 - 1 / 0.071) x (1 + 0.071)
M = 1,00,000 (25.323328) x 1.071
M = ₹27,12,134

So, if you invest ₹1 lakh annually in PPF for 15 years, you can expect a maturity value of over ₹27 lakhs.

How to Use the LIC PPF Calculator:

Using the LIC PPF calculator is straightforward and accessible to everyone. Here's a step-by-step guide:

Step 1: Enter the annual contribution you plan to make in PPF each year.
Step 2: Specify the number of years you intend to stay invested in the scheme.
Step 3: Note that the interest rate remains fixed at 7.1%.
Step 4: Once you enter these values, the calculator will display the invested amount, total interest, and maturity value.

Example:

Let's demonstrate the calculation process with an example. Mr. Anand wishes to invest ₹1.5 lakhs annually in PPF. The current PPF interest rate is 7.1%, and the lock-in period is 15 years. Plugging these values into the formula:

M = 1,50,000 [(1 + 0.071^15) - 1) / 0.071] x (1 + 0.071)
M = 1,50,000 (25.32338) x 1.071
M = ₹40,68,201

If Mr. Anand invests ₹1.5 lakhs annually in PPF, earns an interest rate of 7.1%, and stays invested for 15 years, he will accumulate a maturity amount of nearly ₹41 lakhs.

Benefits of LIC PPF Calculator:

The LIC PPF calculator offers several advantages:

  • The calculator provides accurate estimates of the maturity amount, aiding in efficient financial goal planning.
  • The calculator allows you to experiment with different contribution amounts to find the most suitable savings strategy.
  • Periodic reviews and adjustments to PPF investments are simplified, ensuring alignment with financial goals.

LIC PPF Calculator - Frequently Asked Questions (FAQs)

What is PPF?
PPF stands for Public Provident Fund. It is a government-backed savings scheme. The scheme was designed to encourage long-term savings and investment for individuals.
Who can open a PPF account?
Any Indian citizen can open a PPF account either in their own name or on behalf of a minor.
What is the tenure of a PPF account?
The initial tenure of a PPF account is 15 years, but it can be extended in blocks of 5 years indefinitely.
Is PPF investment tax-free?
Yes. The interest and the maturity amount from a PPF account are not taxed. On top of that, deposits of up to ₹1.5 lakh a year count towards section 123 (the old Section 80C), under the old regime only.