How PPF Maturity Is Calculated
The Public Provident Fund compounds yearly at a government-set rate (currently 7.1%, reviewed quarterly). Each financial year your deposit is added and the whole balance earns a year of interest: Balance = (Previous balance + Deposit) × 1.071, repeated for every year of the term.
Example: ₹1,50,000 every year for 15 years at 7.1% → you invest ₹22,50,000 and the account matures at about ₹40.7 lakh — roughly ₹18.2 lakh of interest on which you pay zero tax.
PPF's superpower is its EEE status: deduction on the way in (80C, old regime), tax-free growth, tax-free maturity. An FD earning the same rate loses 10–30% of its interest to tax; PPF loses nothing. The trade-off is the 15-year lock-in (partial withdrawals allowed from year 7).
Compare with the FD Calculator (taxable, flexible tenure), RD Calculator (monthly deposits) or SIP Calculator (market-linked, historically higher).