PPF at a glance
| Interest rate | 7.1% a year (October–December 2026), compounded yearly, credited on 31 March |
|---|---|
| Deposit | ₹500 to ₹1,50,000 a financial year, in one go or in instalments |
| Term | 15 full financial years after the year you open it |
| Who can open | Resident Indian adults, one account each; a parent or guardian for a minor |
| Tax | Exempt-exempt-exempt: deposit deductible (old regime), interest and maturity tax-free |
| Loan | From the 3rd to the 6th financial year, up to 25% of the balance |
| Withdrawal | Once a year from the 7th financial year, up to 50% of the balance |
| Where to open | Any post office, or a bank branch or bank app that offers PPF |
The government backs both the deposit and the interest, and a court cannot attach a PPF balance to settle a debt.
How PPF interest is worked out
Interest is calculated for each month on the lowest balance between the 5th and the last day of that month, then added to the account once a year on 31 March. So the date you pay in matters: a deposit made by the 5th earns interest for that month, one made on the 6th does not.
The rate is set every quarter by the Ministry of Finance and applies to your whole balance, so your PPF follows the rate up and down over its life. It has stayed at 7.1% since April 2020.
Worked example: ₹1.5 lakh a year
If you deposit the full ₹1.5 lakh before 5 April every year and the rate stays at 7.1%:
- After 15 years: ₹40,68,209 from ₹22,50,000 paid in, so ₹18,18,209 of tax-free interest.
- Extended once, after 20 years: ₹66,58,288 from ₹30,00,000.
- ₹5,000 a month instead (₹60,000 a year), 15 years: ₹16,27,284.
Because the interest is tax-free, PPF at 7.1% matches a taxable deposit paying about 10.1% for someone in the 30% bracket. Try your own figures with the PPF calculator.
Loans, withdrawals and closing early
- Loan (3rd to 6th financial year): up to 25% of the balance at the end of the second year before the year you apply. Interest is 1% a year above the PPF rate, and the loan must be repaid within 36 months.
- Partial withdrawal (from the 7th financial year): one a year, up to 50% of the balance at the end of the 4th year before, or at the end of the year before, whichever is lower. It is tax-free and does not have to be paid back.
- Premature closure (after 5 years): only for a life-threatening illness of you or your family, the higher education of you or your children, or a change to NRI status. Interest for the whole period is then cut by 1%.
After 15 years: extend or close
At maturity you have three choices. You can close the account and take the full balance, tax-free. You can extend it for 5 more years with deposits, any number of times, by submitting Form 4 within a year of maturity. Or you can simply leave it: the balance keeps earning the PPF rate without further deposits, and you can withdraw any amount once a year.
If you keep depositing after maturity without submitting the extension form, those deposits earn no interest and get no tax deduction.
Tax on PPF
PPF is one of the few products that is tax-free at every stage. Under the old regime your deposit, up to ₹1.5 lakh, counts towards Section 80C (now Section 123 of the Income-tax Act, 2025). Under the new regime there is no deduction for the deposit, but the interest and the maturity amount are still tax-free, so PPF works under both. There is no TDS.
How to open a PPF account
Take your Aadhaar, PAN, a photograph and the first deposit (at least ₹500) to a post office or a bank that offers PPF; most large banks, including SBI, also let existing customers open one in their app or net banking. You can name nominees when you open it. Check your balance in the post office passbook, through India Post’s internet banking, or in your bank’s app.
An account in which you skip the minimum ₹500 in a year becomes inactive. You can revive it by paying ₹500 for each missed year plus a fee of ₹50 a year.
PPF compared with the alternatives
- Sukanya Samriddhi Yojana pays more, 8.2%, on the same tax-free terms, but only for a girl child under 10.
- EPF and VPF pay more if you are salaried, but interest on employee contributions above ₹2.5 lakh a year is taxable.
- NSC pays 7.7% for 5 years with the same 80C deduction, but the interest is taxable.
- The 5-year post office time deposit pays 7.5% and also counts for 80C, but the interest is taxable.
See every rate in one table on post office interest rates.
Frequently asked questions
What is the PPF interest rate for October–December 2026?
7.1% a year, compounded yearly. The Ministry of Finance resets it every quarter, and unlike a fixed deposit the new rate applies to your whole balance, not just new deposits.
What is the last date to deposit in PPF to get the full month’s interest?
The 5th of the month. Interest for each month is worked out on the lowest balance between the 5th and the last day of that month, so a deposit on the 6th earns nothing for that month. Depositing the year’s amount by 5 April earns interest for the whole year.
Can I withdraw money from PPF before 15 years?
Yes, partly. From the 7th financial year you can make one withdrawal a year of up to half the balance (the lower of the balance at the end of the 4th year before, or the year before). Closing the account early is allowed only after 5 years and only for serious illness, higher education or a move abroad, with 1% less interest.
Is PPF interest taxable under the new tax regime?
No. PPF interest and the maturity amount are tax-free under both regimes. Only the deduction for the deposit itself (Section 80C, up to ₹1.5 lakh) is limited to the old regime.
What happens to a PPF account after 15 years?
You can close it and take the full balance, extend it in blocks of 5 years with fresh deposits, or leave it without deposits and keep earning interest. To extend with deposits you must submit the extension form within one year of maturity.
Can I open a PPF account for my child?
Yes, a parent or guardian can open one for a minor, but the combined deposit in your own and your child’s accounts cannot exceed ₹1.5 lakh a year. Accounts opened in a minor’s name irregularly earn only the savings account rate until the child turns 18, under rules in force since October 2024.
Can an NRI open or keep a PPF account?
An NRI cannot open a new PPF account. An account opened while resident can run until maturity, but cannot be extended after that.
Sources
- National Savings Institute – Public Provident Fund
- Department of Economic Affairs – small savings interest rates
- India Post – savings schemes
Last checked on 6 October 2026. The interest rate is reviewed every quarter; we update this page when a new rate is notified.