PPF Calculator: Why ₹5,000/Month for 15 Years Gives Less Than You Think
₹5,000/month in PPF for 15 years compounds to ₹16.27 lakh — but only ₹6.78 lakh in real value. Honest PPF math vs equity SIP for Indian savers in 2026.
PPF is the most trusted personal-finance product in India, and for good reason — it's safe, tax-free, government-backed, and disciplined. But the comforting headline rate of 7.1% hides a number that surprises most people: in real, inflation-adjusted purchasing power, a ₹5,000/month PPF over 15 years gives you significantly less than the calculator shows. This article uses the PPF Calculator to walk through what's really happening.
What ₹5,000/month for 15 years actually becomes
PPF compounds annually on the lowest balance between the 5th and the last day of every month. If you invest ₹5,000 on the 1st of every month for 15 years at the current 7.1% rate, you end up with roughly:
| Metric | Value |
|---|---|
| Total invested | ₹9,00,000 |
| Total interest earned | ₹7,27,284 |
| Maturity corpus (nominal) | ₹16,27,284 |
| Real value at 6% inflation | ₹6,78,000 |
| Effective real return | ≈ 1% p.a. |
PPF Calculator
Plug in different monthly amounts, deposit timing, and rate assumptions — the corpus changes more than you'd expect.
Max ₹1.5L per year
15 years lock-in, then 5-yr blocks
Current Govt of India rate: 7.1%
Read the real-value row carefully. ₹16.27 lakh in 2041 will feel like ₹6.78 lakh today. That's because Indian inflation has averaged 5.5–6.5% for the last two decades, and the PPF rate has barely kept pace. PPF is not making you wealthier — it's preserving your purchasing power with a small surplus.
Why ₹16 lakh feels like a big number (and isn't)
Nominal numbers always feel impressive because the human brain doesn't naturally discount for inflation. A ₹16 lakh number triggers 'rich'. But here's the calibration: a ₹50,000 monthly expense today, growing at 6% inflation, becomes ₹1.2 lakh/month in 15 years. ₹16 lakh covers about 13 months of that future expense. That's a 13-month cushion for 15 years of saving.
PPF vs an equity SIP: the 15-year showdown
Let's put the same ₹5,000/month into a Nifty 50 index fund SIP, assume a long-term 12% CAGR (the trailing 20-year Nifty TRI is around 13.5%, so 12% is conservative), and compare:
| Vehicle | Maturity (nominal) | Maturity (real, 6% infl) | Tax treatment |
|---|---|---|---|
| PPF @ 7.1% | ₹16.27 L | ₹6.78 L | Fully tax-free (EEE) |
| Nifty 50 SIP @ 12% | ₹25.22 L | ₹10.52 L | LTCG @12.5% above ₹1.25L |
| ELSS SIP @ 13% | ₹27.41 L | ₹11.43 L | LTCG @12.5% + 80C benefit (old regime) |
Equity beats PPF by roughly 55% in real terms — even after accounting for tax. So why does anyone still use PPF? Because that 7.1% is guaranteed and tax-free, while the 12% equity return is an average across 15 years that includes brutal drawdowns. Most Indian retail investors who claim they'll 'stay invested through volatility' actually stop SIPs at the first 25% fall. For those investors, PPF's lower-but-certain return is in fact higher than what they realise from equity.
What PPF is genuinely good for
- Debt allocation in your portfolio. Every well-built portfolio has 20–30% in debt. PPF is the cleanest debt instrument India offers — better than FDs (taxed at slab) and better than most debt mutual funds post-2023 tax changes.
- 80C deduction in the old tax regime. ₹1.5 lakh/year saves you ₹46,800 in tax at the 30% slab. That's an instant 31% boost to your effective return.
- Forced 15-year discipline. You cannot withdraw fully before 15 years. For people who'd otherwise touch the money, this lock-in is a feature.
- Estate planning. PPF is largely immune to creditor claims and integrates cleanly into nomination/succession.
What ₹5,000/month should actually look like
If ₹5,000/month is your entire monthly investment, putting it all in PPF is the wrong move. A more rational split for a 30-year-old:
- ₹1,500 to PPF — debt anchor + 80C top-up.
- ₹2,500 to a Nifty 50 / flexicap SIP — primary wealth engine.
- ₹1,000 to ELSS for tax efficiency + equity growth (use the ELSS SIP calculator).
Over 15 years, this 30/70 debt-equity split compounds to roughly ₹22 lakh nominal vs ₹16 lakh in pure PPF — and the real value gap is even larger. The PPF anchor cushions the equity volatility; the equity engine builds the actual wealth.
Should you extend the PPF after 15 years?
Yes, almost always — but in 5-year blocks, with the 'extension with contribution' option. The compounding base is now large, and every additional year of 7.1% tax-free growth is meaningful. A ₹16.27 lakh corpus left untouched for 5 more years (with no contribution) grows to ~₹22.9 lakh; with continued ₹5k/month, it grows to ~₹26.5 lakh. The math improves as the corpus grows because compounding finally has scale.
PPF in your 30s and 40s is a savings tool. PPF in your 50s and 60s — when the corpus is mature — quietly becomes one of the best risk-free income generators in India. Use it for the right phase, not as the only tool for every phase.
Frequently asked questions
Q.How much will ₹5,000/month in PPF give after 15 years?
About ₹16.27 lakh at the current 7.1% interest rate. Of that, ₹9 lakh is your contribution and ~₹7.27 lakh is tax-free interest. In inflation-adjusted purchasing power, it's worth roughly ₹6.78 lakh in today's money.
Q.Is PPF better than mutual fund SIP?
Only on a risk-adjusted basis for investors who can't tolerate equity volatility. On absolute returns, a 15-year equity SIP at 12% CAGR builds roughly 55% more real wealth than PPF, even after LTCG tax.
Q.Should I invest ₹5,000 in PPF or split between PPF and equity?
Splitting is almost always better. A ₹1,500 PPF + ₹3,500 equity SIP split builds significantly more wealth over 15 years while still giving you the debt anchor, 80C benefit, and forced lock-in advantages of PPF.
Q.What is the real return on PPF after inflation?
Roughly 1% per annum. The 7.1% headline rate minus ~6% inflation leaves only marginal real growth. PPF preserves purchasing power but doesn't meaningfully build wealth.
Q.Should I extend PPF after 15 years?
Yes, in 5-year blocks with the 'extension with contribution' option. The compounding base is large by then, and continuing earns meaningful tax-free interest — especially useful in your 50s and 60s as a risk-free income source.