Business
PPF calculator: Public Provident Fund can make you a crorepati, but is it the right investment option for you? Explained – The Times of India
Public Provident Fund or PPF is one of the most popular investment options available – and one that can make you a crorepati with disciplined investing. In fact if you were to start a PPF account by the age of 21, you can easily become a crorepati by the age of 46 – way ahead of the conventional retirement age.PPF is a government-backed investment which currently offers an interest rate of 7.1% making it a suitable option for not only risk-averse investors, but also those who are looking at fixed income instruments. Who can open a PPF account and what is the maximum investment limit? Are there any tax benefits of PPF and how long is the lock-in period? Importantly, is PPF the right investment option for you to become a crorepati? How do other investment alternatives compare? Here is a detailed explainer:
Who Can Open a PPF Account?
Any resident Indian can open one PPF account in their own name. Additionally, an individual can open one PPF account on behalf of a minor child or a person with mental illness or intellectual disability, provided they serve as the guardian.However, PPF does not allow for joint accounts. Each minor or dependent is allowed only one account and that too through a guardian.PPF accounts can be opened at post offices, designated banks, and e-banking services.
PPF: What is the minimum & maximum investment limit?
- Minimum investment: Rs 500 per financial year
- Maximum investment: Rs 1.5 lakh per financial year
Deposits can be made in one lump sum or in multiple installments. The overall limit of Rs 1.5 lakh includes contributions made to your own account as well as any accounts you operate for minors.
PPF: What are the tax benefits?
PPF is a EEE product – making it a preferred option for tax saving investments. EEE products or Exempt, Exempt, Exempt are those instruments where the principal investment, interest, and maturity amount are all tax-free.All PPF contributions qualify for tax deduction under Section 80C. This means that individuals opting for the old income tax regime can avail a deduction of up to Rs 1.5 lakh for their PPF investment. While Section 80C benefits are not available under the new income tax regime, the interest earned and the final maturity amount continue to be tax-free.
PPF Interest: How Earnings Are Calculated
Interest rate on PPF is reviewed quarterly by the Ministry of Finance. For your PPF account, the interest calculation is done monthly on the lowest balance between the 5th and the last day of the month. This interest is credited annually, typically at the end of the financial year.This means that to accrue the maximum benefit of the full Rs 1.5 lakh investment limit for a year, investors should look at a lump sum deposit between April 1-5 of a financial year.
PPF: Premature Withdrawal, Loan & More
You can opt for premature withdrawal after five years from the end of the year in which the account was opened. Account holders may withdraw up to 50% of the balance—calculated based on either the fourth year preceding the withdrawal year or the previous year, whichever is lower. Any outstanding loan must be fully repaid before a withdrawal can be made, and discontinued accounts are not eligible for this facility. You can take a loan against your PPF balance between the 3rd and 6th financial year, up to 25% of the balance from two years prior. The loan must be repaid within 36 months, after which only 1% interest per year is charged — but delays push this to 6%. Only one loan can be taken in a year, and no new loan is allowed until the previous one is fully repaid.Premature closure of a PPF account is permitted only under specific circumstances: life-threatening illness of the account holder or immediate family, higher education needs of the account holder or dependent children, or a change in residency status to NRI. In such cases, the account earns interest at a rate 1% lower than originally credited over time. In the event of the account holder’s death, the PPF account must be closed; the nominee or legal heir cannot continue it, although interest is payable until the end of the month preceding the final payout.
PPF Important Facts
Understanding PPF Account Maturity & Extension
A PPF account matures 15 years after the end of the financial year in which it was opened. At maturity, you have three options:
1. Close the Account
You may withdraw the entire balance and close the account.
2. Continue Without Further Deposits
You may choose to let the account remain active without additional deposits. The balance continues to earn interest, and you may make one withdrawal per year. However, once you opt for continuation without deposits, you cannot revert to deposit-based continuation later.
3. Extend in Blocks of 5 Years With Deposits
You may continue the account with deposits for additional 5-year blocks, provided the request is submitted within one year of maturity. It is this provision that allows you to become a crorepati – as explained in the section below
How to become crorepati with PPF
The provision to extend your PPF account beyond the lock-in period of 15 years allows you to earn the benefits of compounding. The biggest advantage of a PPF investment is compounding. Your money grows – not just on the amount you invest each year – but also on the interest that you accumulate over time, creating a powerful snowball effect. Since PPF has a long 15-year lock-in, the interest added annually continues to earn more interest in the following years, leading to exponential growth—especially in the later years of the account. Even though the yearly contribution limit is capped, compounding ensures that disciplined, consistent deposits can grow into a significantly larger corpus by maturity. This makes PPF one of the most effective long-term wealth-building tools for risk-free, tax-free returns. Let’s understand this better over different investment time-frames. In a scenario where you invest the full Rs 1.5 lakh investment limit every year, you will accumulate a corpus of over Rs 40 lakh in 15 years, of which you would have invested Rs 22.5 lakh. But, if you continue to contribute to your PPF account in blocks of 5 years – then with 25 years of investment your accumulated corpus would be over Rs 1 crore, with an investment of only Rs 37.5 lakh! The interest accrued as a result of compounding would be over Rs 65 lakh!
Is PPF the right investment for you?
The answer depends entirely on your investment time-frame, risk taking ability and investment purpose. Experts say that PPF is ideal for conservative investors – backed by the government of India – and offering 7.1% returns with the benefits of compounding, it works well for risk averse individuals, long-term wealth builders and those who are looking to save tax.Apart from the above-mentioned category of investors, Mohit Gang – Co-Founder & CEO Moneyfront says PPF is ideal for investors looking for stable debt allocation, and those without EPF/NPS.According to Prableen Bajpai, Founder, Finfix Research & Analytics, in India, fixed income continues to dominate investor portfolios. “These asset classes provide a sense of security and comfort, but while they are popular, they often fail to reward investors over the long term. For example, bank fixed deposits do not offer true compounding, are rarely able to beat inflation, and are not tax-efficient—especially for high-income individuals,” she tells TOI.However, Prableen is of the view that government-backed schemes such as the PPF stand out due to their specific benefits. “Within the fixed-income category, PPF remains one of the best vehicles for building a long-term portfolio, particularly when the Employee Provident Fund (EPF) is not available as an investment option,” she says.
Source: Finfix
Mohit Gang says that PPF’s nominal return (historically ~7–9%) beats inflation, but only by a small margin. To put it simply, the long-term average rate of return for PPF is around 8%, while the average inflation is around 6%, which makes the real return around 2%, he says.
Mohit Gang shares a practical comparison of PPF with commonly chosen Indian debt & hybrid options:
A.NPS (National Pension System)
Better than PPF when:
• You want equity exposure + tax efficiency• You want 80CCD(1B) extra ₹50,000 tax benefit• Investment horizon is very long (till age 60)
Worse than PPF:
• Partial withdrawal restrictions• Taxable annuity at retirement• No guaranteed return
B. EPF/VPF (Employee Provident Fund)
Better when:
• EPF rate (usually ~8.1–8.25%) > PPF• Mandatory contributions form the base; voluntary VPF can top-up• Salary-based compounding is larger for high earners
Worse than PPF:
• Only available for salaried employees• Interest rate is revised annually and can reduce• Withdrawals are restricted unless conditions met
C. Debt Mutual Funds (post 2023 tax rules)
Better:
• Liquidity• Potentially higher returns depending on category• No lock-in
Worse:
• Gains are fully taxable at slab rate (no indexation) after April 2023 amendments• No guarantee of returns• Credit & duration risk possible• For >30% tax slab investors, post-tax returns become unattractive
D. Sukanya Samriddhi Yojana (SSY) – only if you have a girl child
Better:
• Highest guaranteed small-savings rate (8.2% currently)• Similar EEE tax advantages
Worse:
• Use-case limited• Long lock-in
So should PPF be a part of your portfolio?
Prableen believes that any long-term portfolio should ideally include a mix of debt and equity, and PPF can serve as an effective fixed-income component. “But if a higher-interest, employer-linked EPF is available, then PPF can be replaced with other higher return–generating fixed-income alternatives,” she adds.
(Disclaimer: Recommendations and views on the stock market, other asset classes or personal finance management tips given by experts are their own. These opinions do not represent the views of The Times of India)
Business
Hair oil, ACs, soaps become costlier: How FMCG companies are dealing with Middle East supply blow – The Times of India
Consumer goods companies in India are facing a sharp rise in input costs due to the ongoing war in the Middle East. Surging raw material prices are forcing firms to track costs on a near-daily basis, review pricing frequently, and focus on short-term decisions instead of long-term planning.As firms are struggling with volatile input costs, company executives have told ET that the sudden spike in inflation has made it harder to manage business, while also raising concerns that higher prices could hurt consumer demand. This comes at a time when consumption had started improving after the government reduced goods and services tax rates on several products last September.Havells India chief executive officer Anil Rai Gupta was cited by the financial agency as saying that the company is taking a cautious approach and reviewing the situation month by month. “I have not seen this kind of price escalation in the recent past or in recent memory. Usually, inflation happens, but it is neither so steep nor spread across all product categories… consumer offtake can get affected if the price hike is too sharp.” Bajaj Consumer Care managing director Naveen Pandey said the company is closely tracking input costs and taking decisions almost daily. Speaking during the company’s earnings call last week, he said costs across the business have gone up between 20% and 60%. He added that the war has created “extreme volatility” in the prices of light liquid paraffin and packaging materials. At the same time, prices of mustard and copra have not fallen as expected and are still at pre-war levels. The company is working on cutting costs across its operations.Industry executives said the war has pushed up commodity prices and crude-linked products, increased freight costs, and made imports more expensive due to the fall in rupee. They added that even after a ceasefire, prices have not come down, and uncertainty remains over whether the conflict could start again.In the past month, companies have already raised prices in several categories, including air-conditioners, refrigerators, soaps, detergents, hair oil, apparel, decorative paints and footwear. Some companies have also reduced pack sizes to deal with higher costs. More price hikes are expected by the end of this month.Parle Products vice president Mayank Shah said the pressure on input costs is very high and the uncertainty is “killing”.Retailers are also seeing more careful spending. Trent Ltd, which runs Westside and Zudio stores, said in an investor presentation that while demand was steady at the start of the January–March quarter, the current situation is affecting consumer behaviour.“Consumers are spending with caution, resulting in moderation of discretionary spending on the back of continuing macro uncertainties and potential increase in cost of living. Structurally the demand levels and the underlying market opportunities remain strong. However, the duration and intensity of disruptions in the Middle East along with its second order effect on supply chain, commodity prices and inflation in general has potential implications for near term demand,” the company said.AWL Agri Business executive deputy chairman Angshu Mallick said the company has already increased edible oil prices by Rs 7–10 per kg to pass on higher freight costs. “Being a staples company, we hike or reduce prices immediately. As we are in basic necessities, the volume impact is usually lower,” he said.Meanwhile, the Middle East conflict is inching closer towards the two month mark. The conflict began back on February 28, when the US and Israel launched joint strikes on Iran. In retaliation, Tehran choked the crucial Strait of Hormuz, a pipeline that carries 20% of global energy supplies, straining flow across the globe.
UK retail sales returned to growth last month as they were pushed higher by motorists stocking up on fuel as prices shot higher because of the Iran war, according to official figures.
The Office for National Statistics (ONS) said the total volume of retail sales, which measures the quantity bought, rose by 0.7% in March.
It compared with a 0.6% fall in February, which was revised slightly lower.
The latest reading was also stronger than expected, with economists having predicted a 0.1% dip for the month.
Statisticians said March’s increase was particularly driven by a spike in demand for fuel, which saw sales volumes jump by 6.1% for the month, the highest level since April 2021.
They indicated that this was especially linked to a short period, of less than a week, of particularly elevated sales as unfolding geopolitical events in the Middle East caused a significant rise in prices at the pump.
The value of sales, the amount of money spent, for fuel was up 11.6% amid the jump in petrol and diesel prices.
Recent data from the RAC shows that petrol prices have risen by 18.5% to 157.34 pence per litre, as recorded on Wednesday.
Meanwhile, diesel is up 33.4% to an average of 189.88 pence per litre.
Elsewhere, clothing stores also had a strong month, with sales volumes across the category rising by 1.2% in March amid a boost from better weather conditions.
Technology retailers also saw sales grow after they benefited from new products launches.
However, food sales were weaker, slipping by 0.8% for the month.
The ONS said overall retail sales volumes are up 1.6% for the first three months of 2026, as the industry was also supported by positive growth in January.
ONS senior statistician Hannah Finselbach said: “Retail sales rose in the three months to March, with commercial art galleries doing well earlier in the quarter and sales in beauty products stores rising as retailers reported launching new collections.
“Motor fuel sales were up on the quarter, with retailers commenting that many motorists had been filling up their tanks in March following the start of conflict in the Middle East.”
Elliott Jordan-Doak, senior UK economist at Pantheon Macroeconomics, said: “The first batch of hard data on consumers’ spending since the start of the Iran war was better than expected.
“Granted, stocking up on motor fuels drove headline sales higher, but even excluding petrol retail sales volumes nudged up showing that households largely brushed off the initial shock of higher energy prices.”
Oil prices rose on Friday morning over fears of renewed military escalation in the Middle East after Iran released footage of commandos boarding a cargo ship in the Strait of Hormuz and on reports that Tehran’s air defences had engaged “hostile targets”.
Brent crude futures rose $1.23, or 1.17%, to $106.3 a barrel, while West Texas Intermediate futures were up $1.07, or 1.12%, at $96.92.
Both benchmark contracts settled up more than 3% on Thursday and jumped $5 a barrel after reports that air defences were engaging targets over Tehran and of a power struggle between Iran’s hardliners and moderates.
US President Donald Trump said that Iran may have loaded up its weaponry “a little bit” during the two-week ceasefire, but added that the U.S. military could eliminate it in just a single day.
The ceasefire phase is increasingly looking like a preparatory phase for war, Haitong Futures said in a report.
If US-Iran talks fail to make key progress by the end of April and fighting resumes, oil prices could climb to new highs for the year, it added.
Iran on Thursday posted video of commandos in a speedboat storming a huge cargo ship after the collapse of peace talks, underlining its grip over the Strait of Hormuz through which 20% of global oil and gas usually flows.
As investors and governments around the world look for an enduring peace, Trump said he would not set a “timetable” for ending the conflict with Iran and that he wanted to make “a great deal.”
“Don’t rush me,” he said when asked how long he was willing to wait for a long-term peace deal with Iran.
Prolonged disruptions in the Strait of Hormuz could push global crude and refined-product inventories below five-year seasonal lows by late May or early June, adding a supply-risk premium back into oil prices, said Mingyu Gao, chief researcher for energy and chemicals at China Futures.
Trump also announced in a social media post on Thursday that Israel and Lebanon had agreed to extend their ceasefire by three weeks after a high-level meeting between representatives of both countries in the White House Oval Office.
Before that announcement, Israel warned that it was ready to restart attacks on Iran.
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