Post Office PPF  : Public Provident Fund (PPF) is a good investment option for those seeking a long-term risk-free retirement corpus. A PPF account can be opened at most bank and post office branches across India. PPF is a safe and tax-free option for investment, which guarantees fixed returns in the long term.
PPF is a government-backed plan that currently offers interest rates of 7.1%. Compounding can help you build a large fund over time. The PPF investment period is 15 years, but it can be extended in 5 year blocks. Annual investments can range from Rs 500 to Rs 1.5 lakh and are exempt from tax under the Old Tax Regime, as well as tax-free upon maturity. One can accumulate a fund of approximately Rs 40 lakh in 15 years and up to Rs 1 crore in 25 years by depositing Rs 1.5 lakh annually.
Therefore, it is an investment with safe and guaranteed returns, which can be beneficial for long-term financial goals such as retirement planning.

Here’s a breakdown of the returns you can expect from monthly investments of Rs 1,000, Rs 5,000, and Rs 10,000 in PPF in a post office:

PPF corpus after 15 years with an investment of Rs 1,000 per month

Rs 12,000 in investment annually Over 15 years, the total investment was Rs. 1,80,000. Interest earned: Rs 1,45,457
Maturity amount: Rs 3,25,457

PPF fund after 15 years with a monthly investment of Rs 5,000

Annual investment: Rs 60,000
Total investment over 15 Years: Rs 9,00,000
Interest earned: Rs 7,27,284
Maturity amount: Rs 16,27,284

After 15 years and an investment of Rs 10,000 per month, the PPF corpus

An investment of Rs. 1,20,000 per year Total investment over 15 Years: Rs 18,00,000
Interest earned: Rs 14,54,567
Maturity amount: Rs 32,54,567
However, a person can build a corpus of Rs 40.68 lakh in 15 years if they invest Rs 1.5 lakh per year, the maximum amount allowed by the PPF. There are investments of Rs 22.5 lakh and interest payments of Rs 18.18 lakh in this sum.

PPF rate gets reviewed quarterly by the government

These calculations give you an idea of the potential returns on your PPF investment. But, one should remember that the PPF rate keeps changing as the government reviews it every quarter. The current PPF interest rate is 7.1% for the quarter from January to March 2025.

How is the interest on PPF calculated?

After the fifth of each month, the PPF interest is calculated on the account’s lowest balance. The interest is compounded annually and credited to the account at the end of the financial year.

PPF Account: Open it in a bank or post office – which is the better option?

If you’re confused about where to open a PPF account—in a bank or a post office—the answer is that it doesn’t make much difference. The regulations and benefits are the same for both. Therefore, the decision is based on your convenience.

If you have a bank nearby, opening a PPF account there can be more convenient with easy online access. A post office PPF account, on the other hand, might be a better option for you if you live in a rural area or prefer a branch that is quieter and less crowded. Choose the method that suits you best.