What is the minimum and maximum investment in PPF?

The minimum annual investment in PPF is Rs. 500, and the maximum is Rs. 1,50,000 per financial year. You can invest in lump sum or in up to 12 installments.

Yes, PPF enjoys EEE (Exempt-Exempt-Exempt) tax status. Your investment qualifies for deduction under Section 80C, the interest earned is tax-free, and the maturity amount is also completely tax-free.

Can I withdraw from PPF before maturity?

Partial withdrawal is allowed from the 7th financial year onwards. You can withdraw up to 50% of the balance at the end of the 4th year or the preceding year, whichever is lower.

What happens after PPF matures in 15 years?

After 15 years, you can either withdraw the entire amount, extend for 5 years without contribution, or extend for 5 years with contribution. Extensions can be done in blocks of 5 years indefinitely.

PPF Calculator: Public Provident Fund Interest

Q: What is the current PPF interest rate in 2026?

The current PPF interest rate for Q4 FY 2025-26 (January-March 2026) is 7.1% per annum, compounded annually. This rate is set by the Government of India and reviewed quarterly.

What is Public Provident Fund (PPF)?

Public Provident Fund (PPF) is a long-term savings scheme backed by the Government of India. Introduced in 1968, it has become one of the most trusted and popular investment options for risk-averse investors seeking guaranteed, tax-free returns. The scheme is administered by the Ministry of Finance and accounts can be opened at designated banks and post offices across India.

PPF combines the safety of government backing with attractive interest rates that typically beat inflation. The current PPF interest rate for Q4 FY 2025-26 (January to March 2026) stands at 7.1% per annum, compounded annually.

Key Features of PPF

Interest Rate: 7.1% p.a. (compounded annually), reviewed quarterly by the government.
Lock-in Period: 15 years from the date of account opening.
Investment Limits: Minimum ₹500 per year, Maximum ₹1,50,000 per year.
Tax Benefits: EEE (Exempt-Exempt-Exempt) status under Section 80C.
Loan Facility: Available from 3rd to 6th financial year.
Partial Withdrawal: Allowed from 7th financial year onwards.
Extension: Can be extended in blocks of 5 years after maturity.

How is PPF Interest Calculated?

PPF uses the compound interest formula with annual compounding. The interest is calculated on the lowest balance between the 5th and last day of each month. This is why investing before the 5th of every month maximizes your returns.

                        A = P × [(1 + r)^n - 1] / r × (1 + r)
                    

Where:

A = Maturity Amount
P = Annual Investment
r = Annual Interest Rate (7.1% = 0.071)
n = Number of Years

PPF Tax Benefits Explained

PPF enjoys the coveted EEE (Exempt-Exempt-Exempt) status, making it one of the most tax-efficient investments:

Investment: Deduction up to ₹1.5 lakh under Section 80C.
Interest: Completely tax-free, no TDS deducted.
Maturity: Entire amount is tax-free on withdrawal.

PPF Withdrawal and Loan Rules

Partial Withdrawal: From the 7th financial year, you can withdraw up to 50% of the balance at the end of the 4th preceding year. Only one withdrawal is allowed per financial year.

Loan Against PPF: Between the 3rd and 6th financial year, you can take a loan up to 25% of the balance at the end of the 2nd preceding year. Interest is charged at PPF rate + 1%.

Frequently Asked Questions (FAQs)

What is the current PPF interest rate in January 2026?

The PPF interest rate for Q4 FY 2025-26 (January to March 2026) is 7.1% per annum, compounded annually. This rate has remained unchanged for 8 consecutive quarters.

Can I open multiple PPF accounts?

No, an individual can hold only one PPF account. However, a parent can open an account on behalf of a minor child in addition to their own account. The combined investment limit of ₹1.5 lakh applies across both accounts.

What happens if I don't deposit the minimum amount?

If you fail to deposit the minimum ₹500 in a year, your account becomes inactive. To reactivate, you must pay a penalty of ₹50 per defaulting year plus the minimum ₹500 for each year.

Can NRIs open a PPF account?

NRIs cannot open new PPF accounts. However, if an existing PPF holder becomes an NRI, they can continue the account until maturity on a non-repatriable basis but cannot extend it.

Is PPF better than FD for tax saving?

Yes, for most investors. While both qualify for 80C deduction, PPF interest is completely tax-free whereas FD interest is taxable. PPF also offers higher post-tax returns for those in higher tax brackets.