PPF Calculator

The Public Provident Fund (PPF) is famous for its "EEE" tax status—exempt on investment (via Section 80C), exempt on interest accrual, and exempt on final maturity. It is one of the only completely tax-free debt instruments in India.

However, its specific interest calculation method hides a massive mathematical trap for uninformed investors.

Unlike a standard savings account which calculates interest based on your daily closing balance, PPF calculates interest based on the minimum balance in your account between the 5th and the last day of the month.

This means if you deposit ₹1.5 Lakhs on the 6th of April, that money earns zero interest for the entire month of April! The government treats your balance as if the deposit never happened until May 1st.

Because interest is calculated monthly but compounded annually (credited at the end of the financial year), the absolute best mathematical way to invest in PPF is to deposit your entire yearly amount (up to the ₹1.5 Lakhs limit) between April 1st and April 5th.

By doing this, your entire deposit earns interest for all 12 months of the year. Over a 15-year lock-in period, this simple timing trick results in lakhs of extra rupees compared to someone who deposits their money in March at the end of the financial year.