How PPF works
The Public Provident Fund is a government savings scheme with a 15-year term. You deposit between ₹500 and ₹1.5 lakh each financial year, and the government sets the interest rate every quarter. It is currently 7.1% (July–September 2026). Interest is calculated monthly on the lowest balance between the 5th and the last day of the month, and credited once a year on 31 March.
This calculator assumes you deposit the full yearly amount by 5 April, which earns interest for the entire year. Depositing later in the year earns less.
Each year: balance = (balance + deposit) × (1 + rate)Worked example
Why PPF is popular
- Tax-free returns: interest and the maturity amount are not taxed. That is why PPF's rate matches a fully taxable FD paying about 10.32% for someone in the 30% slab.
- Sovereign guarantee: the government backs the scheme, so there is no default risk.
- Deduction under the old regime: deposits qualify for the ₹1.5 lakh investment deduction if you choose the old tax regime. The new regime gives no deduction, but interest is still tax-free.
- Protected from creditors: a PPF balance generally cannot be attached under a court decree.
Rules to remember
| Feature | Rule |
|---|---|
| Minimum deposit | ₹500 per financial year, or the account becomes inactive |
| Maximum deposit | ₹1,50,000 per financial year (all your PPF accounts combined, including one for a minor child) |
| Loan | Available from the 3rd to the 6th year |
| Partial withdrawal | Allowed after five complete financial years |
| Extension | Unlimited 5-year blocks after maturity, with or without new deposits |
For a daughter under 10, compare with Sukanya Samriddhi, which currently pays 8.2%.
Frequently asked questions
What is the PPF interest rate now?
7.1% a year for July–September 2026. The government reviews it every quarter; the rate applies to your whole balance, not just new deposits.
When should I deposit in PPF to earn the most?
Before 5 April for a yearly lump sum, or before the 5th of each month if you deposit monthly. Deposits made after the 5th don't earn interest for that month.
Can I have two PPF accounts?
No, only one per person, though you can open one on behalf of a minor child. The ₹1.5 lakh limit covers both together.
What happens at maturity?
You can withdraw everything, extend for five years with new deposits, or extend for five years without deposits and keep earning interest.
Official references: National Savings Institute – PPF · India Post – PPF