Investments
PPF calculation rules & compounding schedule
PPF calculates interest monthly on the lowest balance between the 5th and the month-end, and credits it annually on March 31.
The 5th of the month deposit rule
Under PPF scheme rules, interest is calculated on the minimum balance between the close of the 5th day and the end of the calendar month. If you deposit funds on or after the 6th, that deposit earns zero interest for that month.
Compounding and tax-free status
Although interest is calculated every month, it is credited to the account once a year on March 31. This interest compounds annually over the 15-year term. PPF enjoys complete EEE (Exempt-Exempt-Exempt) tax status under the Income Tax Act.
Extension after 15 years
Upon completing 15 financial years, you can extend the account in 5-year blocks indefinitely. You may choose to extend with fresh annual contributions or without making further deposits while continuing to earn interest on the balance.
How to check a SIP projection
Multiply the monthly contribution by the number of months to find total invested. Then compare that with the projection. For ₹10,000 a month over 10 years, total invested is ₹12,00,000; at a 12% annual assumption, WealthAura's start-of-month method projects about ₹23.23 lakh. That difference is a projection, not a return you can rely on.
This guide is for general education. Rules, lender terms, bank terms and individual circumstances can change the result.
Use the relevant calculatorFrequently asked questions
Does a SIP projection guarantee a return?
No. It uses the selected constant return assumption; market-linked investments can rise or fall.
Which calculator should I use with this guide?
Use the SIP calculator for a fixed monthly contribution and treat the output as an illustration.