Introduction
Savings is the first measure with which wealth creation begins and this must be done with great understanding. And that is why there are so many banks saving options must be chosen that allow you to get good yields without any risk. The one of the most widely used options is Public Provident Fund (PPF) account. A PPF account is conceived in such a way that one’s money will be rightly invested once it is earned through hard earned exercise.
Why Choose PPF Account?
If you are a newcomer at your workplace and just begin to save or you are a parent who become financially liable for his or her children then PPF account is perfect for you. However, to determine the interest rates as well as the overall earnings on your PPF investment, it is not easy. This is where a PPF calculator comes in handy when solving the problem.
How Can a PPF Calculator Help You?
PPF calculator is a useful instrument to estimate your PPF account and its functions. It helps in easy computation of the Interest amount and monitoring the evolution of the investment. Interest rates in PPF are revised every three months, and with the help of a PPF account calculator, one does not have to track new rates it will update automatically.
How Does a PPF Interest Rate Calculator Work?
To use a PPF calculator, you need to input some basic details like the total amount you plan to invest, the tenure, and the interest rate. The PPF intrest rate calculator then uses the following formula to compute the maturity amount:
M = P [ ( { (1 + t) ^ n } - 1 ) / i ] x ( 1 + i )
Where:
- M = Maturity Value
- P = Annual Payments
- i = Interest Rate
- n = Number of years
Example Calculation
Let's say you invest ₹1,50,000 annually in your PPF account for 15 years at an interest rate of 7.1%. Using the PPF calculator, your maturity amount at the end of 15 years will be approximately ₹40,68,209.
Yearly Breakdown:
Year | Opening Balance | Annual Investment | Interest Earned | Closing Balance |
1 |
₹0
|
₹1,50,000
|
₹11,400
|
₹1,61,400
|
2 |
₹1,61,400
|
₹1,50,000
|
₹23,666
|
₹3,35,066
|
3 |
₹3,35,066
|
₹1,50,000
|
₹36,865
|
₹5,21,931
|
..... | ..... | ..... | ..... | ..... |
15 |
₹36,61,499
|
₹1,50,000
|
₹3,77,959
|
₹40,68,209
|
Monthly Calculations
It also provides for flexibility with regards to the contribution frequency, meaning that it is possible to set it up for PPF calculator monthly contributions in case one wishes to invest a small amount on a regular basis.
How to Use a Public Provident Fund Calculator
Using a PPF account calculator is simple:
- Input the Values: Input the tenure, total amount to be invested and the rate of interest.
- Get the Results: After inserting these details, the calculator will directly display details of the maturity amount.
- Adjust as Needed: By entering different values, they can look at the effect on the returns given by different contributions.
Once these details are entered, the PPF account calculator will instantly display the estimated future value of your investment.
Benefits of Using a PPF Calculator
- Easy Calculation of Returns: It assist you to determine the amount of interest that you will be earning on the investment.
- Tax Benefits: One can comprehend about the tax benefits that your PPF investments will provide.
- Maturity Period Planning: It helps you determine the right time to cash in, or to take your money out of the investment.
- Accurate Projections: Allows you to accurately predict your investment growth in the course of the following years.
- Convenience: Relieves you the challenge of doing complicated manual estimations.
Benefits of Using an PPF Calculator Online
- User-Friendly: This software is instructive, simple and easy to use as messages get relayed to the targeted individuals without any hassle.
- Quick Results: Covers the ability to execute calculations within a blink of the eye.
- Accurate: Gives accurate results free from human error or mistakes that one could make while handling the data.
- Flexible: Lets you change the value of its input to simulate other situations.
Ready to Start Saving?
Make a move and open a PPF account to start building your wealth for the future. Plan a financial investment using our Public Provident Fund calculator to see an amount grow as you continue to invest. In case, you are in search of a good PPF calculator, Kartikey Traders offers a user-friendly tool that can help you with your financial planning.