PPF Maturity in 15 Years: ₹1.5 Lakh a Year Becomes ₹40.7 Lakh, and Why the Date You Deposit Changes It

Put ₹1.5 lakh into a PPF account every year for fifteen years at the current 7.1% and the PPF calculator says ₹40,68,209 at maturity: ₹22,50,000 of your own deposits and ₹18,18,209 of tax-free interest. That is the headline number, and it is right, but it hides two things the passbook will show you. The maturity depends heavily on when in the year the money goes in, because PPF pays interest only on the lowest balance between the 5th and the last day of each month. And the fifteen years are not the end of the account; the extension blocks after year fifteen are where the interest starts to outrun the deposits.

The maturity table

PPF interest is compounded once a year, on 31 March, and credited to the balance. For a deposit made at the start of each financial year the maturity is the future value of an annuity due: each year's deposit earns a full year of interest, and the interest itself earns interest from the following year. The calculator uses exactly that formula, so its figures match the ones below.

Yearly deposit	15 years	20 years	25 years
₹1,50,000 (the maximum)	₹40,68,209	₹66,58,288	₹1,03,08,015
₹1,00,000	₹27,12,139	₹44,38,859	₹68,72,010
₹50,000	₹13,56,070	₹22,19,429	₹34,36,005
₹12,000 (₹1,000 a month)	₹3,25,457	₹5,32,663	₹8,24,641

Read the columns, not the rows. Over fifteen years the ₹1.5 lakh account earns ₹18.18 lakh of interest on ₹22.5 lakh deposited: interest is 45% of the final balance. Over twenty-five years it earns ₹65.58 lakh on ₹37.5 lakh deposited, and interest is 64% of the balance. The last ten years contribute ₹15 lakh of deposits and ₹47 lakh of growth. Nothing about the rate changed; the balance simply got large enough for 7.1% of it to exceed what you were putting in.

The 5th-of-the-month rule

Interest for each month is calculated on the lowest balance in the account between the close of the 5th day and the end of the month. A deposit made on the 6th does not exist, as far as that month's interest is concerned, until the next month. Two consequences follow.

If you deposit monthly, do it on or before the 5th. ₹12,500 on the 1st of every month earns ₹5,769 of interest in the first year at 7.1%. The same ₹12,500 on the 10th earns ₹4,881, because every deposit loses one month. Over fifteen years, with each year's shortfall compounding, the difference is about ₹22,500 on identical deposits.

If you can, deposit the whole year's amount at once, in the first week of April. ₹1.5 lakh on 5 April earns ₹10,650 in the first year, against ₹5,769 for the same money spread over twelve monthly instalments on the 5th. Over fifteen years the lump-sum account matures at ₹40,68,209 and the monthly one at ₹39,44,599: a ₹1,23,610 gap for the same ₹22.5 lakh deposited. The worst case is the one many people fall into, depositing the full ₹1.5 lakh in the last week of March to claim the deduction before the year closes. That deposit earns nothing for the year it was made in, and the account matures at ₹38,20,989, about ₹2.5 lakh short of the April account.

How the interest is actually calculated

The monthly step is the lowest balance between the 5th and the month end, multiplied by 7.1% divided by twelve. The twelve monthly figures are added up and credited on 31 March as a single entry. So although the interest is calculated monthly, it is compounded yearly: the interest credited in March starts earning only from April. This is why the calculator's annual-compounding formula matches the passbook, and why a formula with monthly compounding overstates the maturity by about ₹84,000 over fifteen years at the maximum deposit.

The rate itself is set by the Ministry of Finance every quarter, along with the other small savings schemes, and 7.1% has been the PPF rate since April 2020. A quarterly change applies to the balance from that quarter on; it does not reprice the past. The calculator's rate slider lets you run the same deposits at, say, 6.5% or 7.5% to see how much a change would move a fifteen-year plan: at ₹1.5 lakh a year, each 0.1% is worth about ₹35,000 at maturity.

The rules that shape the plan

• Minimum ₹500 a year, maximum ₹1,50,000. Deposits above ₹1.5 lakh in a year are not accepted and earn nothing. The limit counts deposits into your own account and into a minor child's account together.
• Lock-in of fifteen full financial years. The account matures on 1 April after fifteen years from the end of the year it was opened in, so an account opened in June 2026 matures on 1 April 2042.
• Extension in five-year blocks, with or without deposits. Choose to keep depositing (form within a year of maturity) and the table above continues; choose not to, and the balance keeps earning 7.1% tax-free with one withdrawal a year allowed. Either way the money is not forced out at fifteen.
• Partial withdrawal from the seventh year. Once a year, up to half of the balance at the end of the fourth year before the withdrawal year or the end of the previous year, whichever is lower.
• A loan between the third and sixth years. Up to 25% of the balance at the end of the second year before the loan year, at 1% a year if repaid within thirty-six months.
• Tax: exempt three times. The deposit qualifies under Section 80C (old regime only, which is the tax regime decision in a sentence), the interest is tax-free, and the maturity is tax-free. Under the new regime the 80C deduction is gone but the interest and maturity are still untaxed, which is the property that keeps PPF competitive with a taxable fixed deposit even at a lower headline rate.

PPF against the alternatives

At 7.1% tax-free, PPF matches a fixed deposit paying 10.1% before tax for someone in the 30% slab, and about 8.4% for someone in the 15% slab. The FD calculator shows what a bank actually offers, and it is rarely close for a fifteen-year horizon. The comparison with equity is the honest one: a ₹12,500-a-month SIP at 12% over the same fifteen years grows to about ₹63 lakh on the SIP calculator, against ₹39.4 lakh for PPF on the same monthly deposit, with the difference being that the PPF figure is guaranteed and the SIP figure is a historical average. PPF vs ELSS works through that trade-off for the 80C decision, and Section 80C options compared puts PPF beside EPF, NSC and the rest.

For retirement planning the EPF vs NPS guide covers the two schemes that sit beside PPF, and the retirement calculator turns a monthly expense into the corpus all three have to add up to.

What people get wrong

• Depositing in March. It claims the deduction but loses a full year of interest on that deposit. Move the habit to April.
• Depositing after the 5th. Every monthly deposit after the 5th loses a month of interest, about ₹74 per ₹12,500 at 7.1%, ₹888 a year, ₹22,500 over fifteen years.
• Closing at fifteen. The extension keeps the 7.1% tax-free rate on a balance of ₹40 lakh, which is ₹2.9 lakh a year of tax-free interest with no fresh deposit needed. Few instruments offer that to a retiree.
• Assuming monthly compounding. The rate is calculated monthly but credited once a year. A calculator that compounds monthly overstates the maturity.
• Treating the rate as fixed for fifteen years. It is reviewed every quarter. Plan on it and re-run the calculator when it changes.

FAQ

How much will I get if I invest ₹1.5 lakh a year in PPF for 15 years?

₹40,68,209 at 7.1%, if each year's deposit is made at the start of April. Of that, ₹22,50,000 is your own money and ₹18,18,209 is tax-free interest. Deposit monthly on the 5th instead and the figure is ₹39,44,599; deposit each year in late March and it is ₹38,20,989.

Why does the date of deposit matter in PPF?

Because interest for a month is calculated on the lowest balance between the 5th and the last day of that month. A deposit after the 5th earns nothing until the following month, and a deposit in late March earns nothing for that financial year at all.

Is PPF interest compounded monthly or yearly?

Yearly. The interest is calculated month by month on the lowest balance after the 5th, but the total is credited once, on 31 March, and starts earning interest itself only from the next April. The PPF calculator uses annual compounding for this reason.