🏦 PPF Calc India

Annual Deposit

The annual deposit in PPF refers to the total amount contributed to a PPF account in a financial year, with a minimum of Rs 500 and a maximum of Rs 1,50,000.

Detailed Explanation

## PPF Annual Deposit Rules Every financial year (April to March), you must deposit at least Rs 500 and can deposit up to Rs 1,50,000 in your PPF account. These limits apply per account, and if you have a minor child's PPF account too, the combined limit across both accounts is Rs 1,50,000. ## Deposit Methods You can make your annual deposit in several ways: - **Lump sum**: One deposit for the full amount - **Monthly installments**: Up to 12 deposits per year - **Irregular amounts**: Deposit whenever you want, as long as you meet the minimum and don't exceed the maximum ## Optimal Deposit Strategy Since PPF interest is calculated on the minimum balance between the 5th and last day of each month, the most efficient strategy is to deposit your full annual amount before April 5th. This ensures you earn interest on the entire amount for all 12 months. If you can't deposit the full amount upfront, deposit whatever you can before the 5th of each month to maximize monthly interest calculations. ## What Happens If You Miss the Minimum? If you don't deposit at least Rs 500 in a financial year, your account becomes dormant (not closed). To reactivate it, you'll need to pay: - Rs 50 penalty per year of default - Plus the minimum Rs 500 for each defaulted year - Plus the current year's minimum Rs 500 The account continues to earn interest even when dormant, but you can't take loans or make withdrawals until it's reactivated. ## Deposits Above Rs 1,50,000 Any amount deposited above Rs 1,50,000 in a year is returned without interest. It doesn't earn interest and doesn't count toward 80C deduction. Banks and post offices are supposed to reject excess deposits. Plan your annual deposits with our [PPF calculator](/) to optimize your returns over the full 15-year tenure.

See it in practice

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Related Terms

PPF

Public Provident Fund (PPF) is a long-term savings scheme backed by the Government of India that offers tax-free returns at 7.1% per annum with a 15-year lock-in period.

EEE Status

EEE (Exempt-Exempt-Exempt) status means an investment is tax-free at all three stages: when you invest, while it earns returns, and when you withdraw at maturity.

Section 80C

Section 80C of the Income Tax Act allows Indian taxpayers to claim a deduction of up to Rs 1,50,000 per year from their taxable income by investing in specified instruments like PPF, ELSS, and tax-saver FDs.

Compound Interest

Compound interest is interest calculated on both the initial principal and the accumulated interest from previous periods, causing your money to grow exponentially over time.

Maturity Amount

The maturity amount is the total sum you receive when a PPF account completes its full tenure, including all your deposits plus accumulated compound interest.

Lock-in Period

The lock-in period is the minimum time you must keep your investment before you can withdraw. PPF has a 15-year lock-in, though partial withdrawals are allowed from year 7.

Partial Withdrawal

Partial withdrawal from PPF is allowed from the 7th financial year onwards, with the maximum amount being 50% of the balance from 4 years prior or the preceding year's balance, whichever is lower.

Loan Against PPF

PPF account holders can take a loan against their PPF balance from the 3rd to 6th financial year, borrowing up to 25% of the balance from two years prior at an interest rate of PPF rate plus 1%.

PPF Extension

After the 15-year maturity, a PPF account can be extended in 5-year blocks either with continued contributions or without, allowing the corpus to keep earning tax-free interest.

Tax-Free Returns

Tax-free returns mean the gains from an investment are not subject to income tax, allowing you to keep the full amount earned without any deductions for taxes.

Risk-Free Investment

A risk-free investment is one where your principal and returns are guaranteed, typically backed by a sovereign government. PPF is considered risk-free because it carries a Government of India guarantee.

PPF Account

A PPF account is a savings account opened under the Public Provident Fund scheme at designated banks or post offices, where deposits earn 7.1% annual interest with tax benefits under Section 80C.

Interest Rate

The PPF interest rate is the annual rate at which your PPF balance earns returns, currently set at 7.1% per annum and revised quarterly by the Government of India based on government bond yields.

Sovereign Guarantee

A sovereign guarantee means the Government of India stands behind the PPF scheme, ensuring that both your principal and accumulated interest are fully protected regardless of economic conditions.