PPF (Public Provident Fund) 2026 — Interest Rate, Calculator, Rules & Tax Benefits
Start with ₹500, lock in for 15 years, earn a guaranteed 7.1% and take home a fully tax-free maturity. Every PPF rule, calculation and strategy — on one page.
Short answer — what is PPF and what is it paying in 2026?
The Public Provident Fund (PPF) is a 15-year, government-guaranteed savings scheme that pays 7.1% per annum for the July–September 2026 quarter. You can deposit a minimum of ₹500 and a maximum of ₹1,50,000 in a financial year. PPF carries EEE status — the deposit is deductible, the interest is tax-free, and the maturity amount is tax-free. Investing ₹1.5 lakh a year for 15 years builds roughly ₹40.68 lakh, entirely tax-free.
📑 What this guide covers
PPF interest rate — Q2, FY 2026-27
1 July – 30 September 2026 · Compounded annually · Unchanged since April 2020
Next review: the Department of Economic Affairs notifies rates for the October–December 2026 quarter around 30 September 2026. This page is updated whenever the rate changes.
What is PPF? A complete beginner's guide
The Public Provident Fund (PPF) is a long-term savings scheme launched by the Government of India in 1968. It is administered by the Ministry of Finance and carries a sovereign guarantee — which makes it about as safe as money gets in India.
PPF exists to encourage disciplined long-term saving for retirement, children's education and secure wealth building. It is one of the very few schemes that qualifies for EEE (Exempt-Exempt-Exempt) treatment — tax relief at all three stages.
What EEE actually means for your money
- Exempt on investment: deposits up to ₹1.5 lakh a year are deductible (Section 123 of the Income-tax Act 2025 — previously Section 80C)
- Exempt on earning: the interest credited each year is fully tax-free, with no TDS
- Exempt on withdrawal: the entire maturity amount is tax-free — no capital gains tax
Who can open a PPF account?
Any resident Indian can open one account in their own name. A parent or guardian may also open an account for a minor child — but the combined deposits across both accounts still cap at ₹1.5 lakh a year. HUFs, NRIs and joint accounts are not permitted.
PPF calculator 2026 — what will your maturity be?
Move the sliders and watch how 7.1% compounding builds your corpus year by year.
🧮 PPF maturity calculator
Assumes deposits at the start of each financial year, compounded annually
🔒 Set by the Government of India — currently 7.1% (Q2 FY 2026-27)
*Calculated at 7.1% p.a. for illustration only. Actual returns change if the rate is revised.
Open the full PPF calculator →PPF interest rate 2026 — history and how it is calculated
Current rate: 7.1% p.a. (July–September 2026)
PPF has paid 7.1% since 1 April 2020. The Finance Ministry reviews small savings rates every quarter and has left this one untouched through many consecutive reviews — unusual stability for a long-horizon product.
📊 PPF interest rate history
| Period | Rate | Note |
|---|---|---|
| Up to 2015-16 | 8.7% – 8.8% | Peak-rate era |
| 2016-17 | 8.1% | Quarterly review system begins |
| 2017-18 | 7.9% (avg) | Gradual decline |
| 2018-19 | 8.0% | Brief uptick |
| 2019-20 | 7.9% | Trimmed again |
| From April 2020 | 7.1% | Pandemic-era cut |
| Q2 FY 2026-27 (Jul–Sep 2026) | 7.1% ✓ | Unchanged — current rate |
🔢 How PPF interest is calculated
The "5th of the month" rule — the costliest thing people get wrong
Interest accrues on the lowest balance between the 5th and the last day of each month, and is credited at the end of the financial year. Deposit ₹1.5 lakh on 3 April and you earn 12 months of interest; deposit on 7 April and you earn 11.
| Deposit date | Months of interest | Annual interest on ₹1.5 lakh | Loss vs 5 April |
|---|---|---|---|
| On or before 5 April | 12 months | ₹10,650 | — |
| 6 April – 5 May | 11 months | ₹9,763 | −₹887 |
| 6 May – 5 June | 10 months | ₹8,875 | −₹1,775 |
| After 5 July | 9 or fewer | ₹7,988 or less | −₹2,662 or more |
*Single-year impact. Repeat the same delay for 15 years and compounding turns it into a loss well above ₹1 lakh.
PPF tax benefits — Section 123 (formerly 80C) and EEE status
PPF is one of a handful of Indian investments that qualifies for EEE (Exempt-Exempt-Exempt) treatment — investment, interest and withdrawal all escape tax.
Important update: Section 80C became Section 123 from 1 April 2026
The new Income-tax Act 2025 took effect on 1 April 2026, and the deductions that used to sit under Section 80C now sit under Section 123. The ₹1.5 lakh ceiling and the conditions are unchanged — only the section number moved. Most websites still say "80C", so look for Section 123 when you file.
Investment — exempt
Deposits up to ₹1,50,000 a year are deductible under Section 123 (previously 80C). This benefit applies only if you file under the old tax regime.
Interest — exempt
The 7.1% credited each year is completely tax-free. No TDS is deducted and no tax is payable — you simply report it as exempt income.
Withdrawal — exempt
The full maturity amount (principal plus interest) is 100% tax-free, and partial withdrawals are tax-free too.
Old regime vs new regime — what changes for PPF
Old regime: you get the ₹1.5 lakh deduction, worth roughly ₹46,800 in annual tax saved for a 30% slab taxpayer (including cess). New regime: no deduction, but the interest and maturity remain tax-free either way. So PPF still works as a clean tax-free debt holding under the new regime — you simply lose the entry-level bonus.
What is 7.1% tax-free really worth?
For a 30% slab taxpayer, a tax-free 7.1% is equivalent to a taxable return of roughly 10.2% p.a. In the 20% slab it works out to about 8.9%, and in the 5% slab about 7.5%. That is why PPF still outcompetes most bank fixed deposits on a post-tax basis.
How to open a PPF account online — 5 steps
You can open a PPF account through any authorised bank (SBI, HDFC, ICICI, Axis, PNB, BoB) or at a post office branch. The online route is fastest:
Log in to your net or mobile banking
Use the bank where your savings account and KYC already sit. SBI YONO, HDFC, ICICI iMobile, Axis and PNB all support online PPF opening.
Find the "Open PPF account" option
Go to Investments / Deposits / Tax Saving → select Public Provident Fund → choose "Self account" or "Minor account".
Fill in details and complete KYC
Enter Aadhaar, PAN, nominee details and your intended yearly deposit. Most fields pre-fill from your existing bank record.
Make the first deposit
₹500 is enough to open the account, and you can put in up to ₹1.5 lakh in the first year itself. The money is debited instantly from your linked savings account.
Save the account number and e-passbook
The account number is generated immediately. Download the e-passbook — you will need it for future deposits, loans and withdrawal requests. Set up an auto-debit for the 1st or 3rd of each month while you are there.
Documents required
PAN card · Aadhaar / voter ID / driving licence for KYC · passport-size photograph · nominee details (Form E) · for post office accounts, Form-1 and your savings account details.
Bank or post office — which is better?
The rate is identical (7.1%) either way. A bank makes online deposits, auto-debit and e-statements easy. A post office suits people without a nearby bank branch. You can transfer the account between the two later without restarting the 15-year clock.
Lock-in, partial withdrawal and extension after 15 years
PPF locks your money for 15 financial years. That long horizon is exactly what makes the compounding work — your interest spends more than a decade earning its own interest.
Years 1–5
No withdrawal. Premature closure is possible only after 5 years and only on specified grounds — serious illness, a dependent child's higher education, or a change in residency status. The penalty is 1% off the interest for the whole period.
Years 7–15 (partial withdrawal)
From the 7th financial year you can withdraw the lower of 50% of the balance at the end of the 4th preceding year and 50% of the previous year's balance. One withdrawal per year.
Year 15+ (maturity)
Withdraw everything tax-free, or extend the account in 5-year blocks — with fresh contributions or without them.
📅 Three options at the 15-year mark
| Option | Fresh deposits | Withdrawal access | Best for |
|---|---|---|---|
| Close the account | Not applicable | Entire balance, tax-free | People who need the money now |
| Extend with contributions | Yes, up to ₹1.5 lakh/year | Up to 60% of the opening balance across the 5-year block | Those still building corpus and claiming the deduction |
| Extend without contributions | No | One withdrawal a year, any amount | Those who just want tax-free interest with flexibility |
Don't miss the one-year deadline
To extend with contributions you must submit Form H within one year of maturity. Miss it and the account automatically continues in the "without contributions" mode — after which any money you deposit earns no interest and is treated as an irregular deposit.
Investing ₹1.5 lakh a year at 7.1% builds roughly ₹1.03 crore in 25 years and about ₹1.54 crore in 30 years — entirely tax-free. For an ordinary salaried Indian, this remains the safest route to a crore. — Arthzo Research Team calculation, assuming a constant 7.1%
PPF vs FD vs SIP vs EPF vs SSY — which is better?
India's five most popular long-term options, compared on the criteria that actually matter.
| Criterion | PPF 🟢 | Bank FD | SIP (mutual fund) | EPF | SSY |
|---|---|---|---|---|---|
| Current return | 7.1% guaranteed | 6.5–7.5% | 10–14% market-linked | 8.25% | 8.2% |
| Tax on returns | Nil (EEE) | Fully taxable + TDS | LTCG applies | Exempt, with conditions | Nil (EEE) |
| Risk | Nil (sovereign) | Very low | Market risk | Very low | Nil |
| Lock-in | 15 years | Flexible, from 7 days | None (ELSS: 3 years) | Until exit/retirement | 21 years |
| Liquidity | Partial from year 7 | High | Highest | Limited | Very limited |
| Who can invest | Any resident Indian | Everyone | Everyone | Salaried only | Girl child under 10 |
| Inflation protection | Moderate | Weak | Best | Moderate | Moderate |
The balanced play: PPF and SIP together
PPF is the safe foundation of the portfolio — guaranteed 7.1%, zero risk. SIP is the growth engine — potentially 12%+, with market risk attached. Rather than choosing between them, fill your debt allocation with PPF and your equity allocation with SIPs.
What does ₹500 a month become? (Topic 21)
| Period | PPF (7.1%) | FD (6.5%) | SIP (12% assumed) |
|---|---|---|---|
| After 5 years | ₹37,028 | ₹35,528 | ₹41,243 |
| After 10 years | ₹89,205 | ₹84,658 | ₹1,16,170 |
| After 15 years | ₹1,62,728 | ₹1,52,594 | ₹2,52,288 |
| After 20 years | ₹2,66,332 | ₹2,46,539 | ₹4,99,574 |
| Tax on returns | Nil ✅ | As per slab ❌ | LTCG ⚠️ |
*PPF assumes ₹6,000 deposited at the start of each year; FD and SIP assume ₹500 monthly with monthly compounding. The 12% SIP return is an assumption, not a promise.
PPF deposit rules and the best time to invest
📋 Deposit rules
- Minimum ₹500 per financial year — mandatory to keep the account active
- Maximum ₹1,50,000 per financial year
- Any number of instalments, from 1 to 12
- Cash, cheque, DD, NEFT or online transfer all accepted
- A minor's account shares the guardian's ₹1.5 lakh ceiling
- Anything above the ceiling earns no interest and gets no deduction
⏰ Best time to deposit
- Lump sum: on or before 5 April each year
- Monthly: before the 5th of every month
- Set auto-debit for the 1st or 3rd to allow for holidays
- Best month to open a new account: April
- Route bonuses into PPF the moment they land, not later
What happens if the account goes dormant?
Skip the ₹500 minimum in any year and the account becomes inactive — no loan, no partial withdrawal. To revive it you pay ₹500 for each missed year plus a ₹50 penalty per year. The silver lining: the existing balance keeps earning interest throughout.
The maximum-benefit strategy
Deposit the full ₹1,50,000 before 5 April every year. Compared with spreading it monthly, this earns roughly ₹5,000–₹6,000 more interest annually — and over 15 years, compounding pushes that gap past ₹1.5 lakh.
Loan against PPF — rules, rate and eligibility
Worked example
Say you apply in 2026-27. The reference balance is the one from two years earlier — 31 March 2025. If that was ₹4,00,000, your maximum loan is ₹1,00,000 (25%). Interest runs 1% above the PPF rate, so 8.1%. Principal must be repaid within 36 months, interest after that. A second loan is only available once the first is fully cleared.
Why borrow against PPF instead of taking a personal loan?
| Criterion | Loan against PPF | Personal loan |
|---|---|---|
| Interest rate | ~8.1% p.a. | 11–24% p.a. |
| Security | Your own PPF balance | None (unsecured) |
| Credit score | Not checked | 750+ typically needed |
| Processing fee | Nil or nominal | 1–3% |
| Effect on your PPF | The borrowed portion stops earning interest | No effect |
Two things people miss
Since the PPF Scheme 2019 came into force on 12 December 2019, loan interest is 1% above the PPF rate, not 2% — so 8.1% today. But the borrowed amount stops earning 7.1% while it is outstanding, and if the principal is not repaid within 36 months the rate on the outstanding balance jumps to 6%. Partial withdrawals open up in year 7, which is why the loan facility closes after the 6th financial year.
Can NRIs invest in PPF? The 2026 position
NRIs cannot open a new PPF account
Under the rules in force, non-resident Indians are not eligible to open a fresh PPF account. This restriction has applied since 2003.
If you became an NRI after opening the account
- The existing account stays valid until the 15-year maturity
- You may keep depositing until maturity, from your NRO account
- The account cannot be extended beyond that 15-year term
- Interest keeps accruing at the prevailing rate
- Proceeds are credited to your NRO account and remain tax-free in India
- Repatriating the money abroad requires Forms 15CA/15CB from a chartered accountant
Alternatives for NRIs
NRE fixed deposits (interest tax-free in India, fully repatriable), NRO FDs (taxable), or mutual funds through an NRO account. If you expect to return to India eventually, opening a PPF account before you leave is worth doing.
Using PPF for retirement and children's education
For a child's education
Open a minor's PPF account as soon as the child is born. Just ₹10,000 a year grows to about ₹2.71 lakh in 15 years — money that arrives exactly when college fees do.
- A parent or guardian opens and operates the account
- Deposits share the guardian's ₹1.5 lakh annual ceiling
- The deduction is claimed by the guardian
- The child takes over the account at 18
For retirement
Start at 30, contribute ₹1.5 lakh a year until 60, and at 7.1% you land at roughly ₹1.54 crore — tax-free, government-backed, zero market risk.
- The earlier you start, the more compounding does the work
- Keep extending in 5-year blocks after year 15
- Pair it with NPS for a fuller retirement plan
- Not a rupee of tax on withdrawal
Corpus by starting age (₹1.5 lakh a year at 7.1%)
| Started at age | At 45 | At 50 | At 55 | At 60 |
|---|---|---|---|---|
| 25 | ₹66.58 lakh | ₹1.03 crore | ₹1.54 crore | ₹2.27 crore |
| 30 | ₹40.68 lakh | ₹66.58 lakh | ₹1.03 crore | ₹1.54 crore |
| 35 | ₹22.30 lakh | ₹40.68 lakh | ₹66.58 lakh | ₹1.03 crore |
| 40 | ₹9.26 lakh | ₹22.30 lakh | ₹40.68 lakh | ₹66.58 lakh |
*Assumes a constant 7.1% and deposits at the start of each year, with the account extended in 5-year blocks beyond year 15. Illustration only.
Nomination, second accounts and transfers
Nomination rules
- Nominate at opening or any time later using Form E
- Multiple nominees allowed, with a share percentage for each
- A minor nominee needs a named guardian
- Nomination does not apply to a minor's own account
- Banks and post offices no longer charge for nominee changes
Can you hold two PPF accounts?
No. One account per person across all banks and post offices in India. If a second one is opened by mistake it is merged into the first, and anything above the ceiling earns no interest. The exception: a separate account for your minor child.
Transfers
- Branch to branch: free
- Bank to post office and post office to bank: both allowed
- Apply at the originating branch; takes 2–4 weeks
- Tenure and records carry over intact
- A transfer does not restart the 15-year clock
10 PPF mistakes that quietly cost lakhs
Depositing after the 5th
You forfeit a month's interest each time. Repeated for 15 years, that is over ₹1 lakh gone.
Fix: auto-debit on the 1stForgetting the ₹500 minimum
The account goes dormant — no loan, no withdrawal — and revival costs ₹50 per missed year.
Fix: an April reminderOpening the account in March
March counts as a full financial year even though you earn interest for only a few days.
Fix: open in AprilClosing at exactly 15 years
You leave the extension effect on the table — ₹40.68 lakh at 15 years becomes ₹1.03 crore at 25.
Fix: extend in 5-year blocksOpening a second account
It gets merged into the first, and the excess earns nothing at all.
Fix: one account onlyOpening the child's account late
Every year of delay removes a compounding year from the education fund.
Fix: open at birthSkipping the nomination
Without it, the family faces a long legal process to claim the corpus.
Fix: file Form E todayClosing early without real need
Premature closure recalculates the entire period's interest 1% lower — an expensive exit.
Fix: consider the loan firstIgnoring which tax regime you're in
The Section 123 (ex-80C) deduction is unavailable under the new regime — run both numbers.
Fix: compare both regimesPutting everything into PPF
7.1% only just clears inflation. A long horizon needs some equity alongside it.
Fix: pair PPF with SIPPPF for salaried employees vs the self-employed
💼 Salaried employees
- EPF already exists, so PPF adds supplementary tax-free savings
- EPF and PPF both count towards the same ₹1.5 lakh deduction ceiling
- Use PPF to fill whatever room EPF leaves
- Set the auto-debit for the 1st, right after salary credit
- The account continues untouched when you change jobs
🏪 Self-employed and business owners
- No EPF, so PPF becomes the primary tax-free retirement vehicle
- Use the full ₹1.5 lakh to maximise the deduction
- Irregular income suits the April lump-sum approach
- A guaranteed return balances an unpredictable business
- Combines well with NPS for a complete retirement plan
Is PPF still worth investing in during 2026?
With equity delivering 12–14% and some FDs touching 7.5%, it is fair to ask whether 7.1% still earns its place. The honest answer:
✅ Why PPF still works
- 7.1% tax-free ≈ 10.2% taxable for a 30% slab taxpayer
- Zero risk — a sovereign guarantee, not a bank guarantee
- Up to ₹46,800 in annual tax saved under the old regime
- Market crashes do not touch the return
- The most solid debt anchor available to a retail investor
⚠️ When PPF alone isn't enough
- If you are targeting 12%+ returns over the long run
- If you may need the money before 15 years
- If you have opted for the new tax regime (no deduction)
- If inflation stays above 7% for an extended period
- If you are starting past 50, with a short compounding runway
Verdict: yes, PPF remains one of India's best safe investments
For risk-averse investors, old-regime taxpayers, and anyone who wants a guaranteed ₹40 lakh to ₹1 crore tax-free corpus, nothing else quite matches it. Treat it as the secure foundation and build SIPs and equity on top. Putting everything into PPF is as much a mistake as skipping it entirely.
All 25 PPF topics at a glance
Bookmark this page — every PPF question, answered in one place.
📖 What is PPF — the complete basics
Launched 1968, sovereign guarantee, EEE status, 7.1% interest, ₹500–₹1.5 lakh deposits, 15-year lock-in.
Basics⚖️ PPF vs FD vs SIP — which wins?
PPF leads on tax-free certainty, SIP on growth, FD on liquidity. The best answer is PPF and SIP together.
Compare💰 Latest PPF interest rate 2026
7.1% p.a. for Q2 FY 2026-27, unchanged since April 2020, calculated on the lowest balance after the 5th.
Rate🏦 How to open a PPF account online
Five steps through SBI, HDFC, ICICI, Axis or PNB net banking — log in, select PPF, complete KYC, deposit, done.
How-to🏷️ PPF tax benefits under Section 123
Exempt at all three stages: deduction on deposit (Section 123, ex-80C), tax-free interest, tax-free maturity.
Tax🎓 Planning a child's education
Open the minor's account at birth. ₹10,000 a year becomes ₹2.71 lakh in 15 years — right on time for college.
Strategy🏖️ PPF for retirement planning
₹1.5 lakh a year for 30 years builds about ₹1.54 crore tax-free; 25 years gets you to ₹1.03 crore.
Strategy🔒 The lock-in period explained
15 financial years. Partial withdrawal from year 7; premature closure after 5 years on specified grounds with a 1% penalty.
Rules💵 How much can you deposit a year?
₹500 minimum, ₹1.5 lakh maximum, 1 to 12 instalments. Miss the minimum and the account goes dormant.
Limits💸 Withdrawal rules
From year 7 — the lower of 50% of the 4th preceding year's balance and 50% of last year's. One withdrawal a year.
Withdrawal📅 Extension after 15 years
Extend with or without fresh contributions, in 5-year blocks. The contribution option needs Form H within one year.
Extension2️⃣ Can you have two PPF accounts?
No. One account per person; an accidental second one gets merged into the first.
Rules⚠️ Common mistakes
Depositing after the 5th, missing ₹500, skipping nomination, closing at 15 years, opening a duplicate account.
Pitfalls📝 Nomination rules
Add or change nominees any time with Form E. Multiple nominees and share percentages are allowed.
Nominee🔑 Loan against PPF
Available in financial years 3 to 6, up to 25% of the balance two years prior, at PPF rate + 1% = 8.1%.
Loan⏰ The best time to deposit
Before the 5th of each month; before 5 April for lump sums. A two-day delay costs about ₹887 a year.
Strategy🧮 PPF calculator guide
Use the live calculator above. ₹1.5 lakh × 15 years = ₹40.68 lakh (₹22.5 lakh invested, ₹18.18 lakh interest).
Calculator🏭 PPF vs EPF — the differences
EPF pays 8.25% but is salaried-only with employer contribution. PPF pays 7.1%, is open to all and far more flexible.
Compare💼 Salaried vs self-employed
Salaried get EPF plus PPF; the self-employed rely on PPF as their main retirement instrument.
Compare🤔 Is PPF worth it in 2026?
Yes — 7.1% tax-free is about 10.2% taxable in the 30% slab, and it anchors the safe side of a portfolio.
Analysis🌱 What ₹500 a month becomes
₹6,000 a year grows to ₹37,028 in 5 years, ₹89,205 in 10 and ₹1.63 lakh in 15 — all tax-free.
Growth📊 Maturity calculation examples
₹1.5 lakh a year: 15 years = ₹40.68 lakh | 20 = ₹66.58 lakh | 25 = ₹1.03 crore | 30 = ₹1.54 crore.
Examples🌍 Can NRIs invest in PPF?
No new accounts. An existing account runs to its 15-year maturity but cannot be extended.
NRI🔄 Account transfer rules
Branch to branch, bank to post office and back — all permitted, 2–4 weeks, with no restart of the tenure.
Transfer🏅 The biggest benefits of PPF
Sovereign guarantee, EEE tax status, guaranteed interest, loan access, partial withdrawal and flexible deposits.
BenefitsYour complete PPF planning kit
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