What is the current PPF interest rate?

The PPF interest rate is set by the Ministry of Finance, India, and reviewed quarterly (though it has been unchanged at 7.1% since April 2020). It is based on a spread over 10-year government bond yields. At 7.1% compounded annually with EEE tax status, PPF significantly outperforms FDs on a post-tax basis. For someone in the 30% tax bracket, 7.1% tax-free is equivalent to earning approximately 10.1% from a taxable FD (7.1 / (1 - 0.30) = 10.14%). The rate is guaranteed by the Government of India - making PPF one of the safest fixed-income instruments available to retail investors. Monitor the NSSF notification each quarter if you are tracking rate changes.

What is the lock-in period for PPF?

PPF has a mandatory 15-year lock-in from the date of account opening. However, partial access is available before maturity. From the 7th financial year onward, you can make one partial withdrawal per year of up to 50% of the balance at the end of the 4th year or the year immediately before the withdrawal year, whichever is lower. From the 3rd to the 6th year, you can borrow against the PPF balance as a loan (at 1% above PPF rate). After 15-year maturity, you can close the account and withdraw fully, extend for 5 years without contributions (balance keeps earning interest), or extend with fresh contributions - indefinitely in 5-year blocks. This flexibility makes PPF suitable as both a retirement and medium-term savings vehicle.

What is the maximum PPF investment per year?

The annual PPF investment limit is ₹1,50,000 per account per financial year (April to March). You can make up to 12 deposits in a year - there is no requirement for a single annual deposit. The minimum annual contribution is just ₹500; missing this causes the account to become dormant, which can be revived by paying a ₹50 penalty per dormant year plus the minimum ₹500. Strategically, depositing the full ₹1,50,000 at the start of April (before the 5th of the month) ensures you earn interest for the entire year on that amount. PPF interest is calculated on the minimum balance between the 5th and last day of each month - so money deposited before the 5th earns interest for that month, after the 5th does not.

Is PPF really tax-free?

Yes, PPF enjoys EEE (Exempt-Exempt-Exempt) tax status - the most favourable tax treatment for any investment in India. All three stages are tax-free: your annual contribution of up to ₹1,50,000 is deductible under Section 80C, reducing your taxable income; the interest credited each year is completely exempt from income tax; and the maturity amount on withdrawal is entirely tax-free. This compares favourably to FD (interest fully taxable every year), mutual funds (LTCG at 12.5% on equity gains above ₹1.25 lakh), and even NPS (only 60% of corpus is tax-free on withdrawal, rest goes to taxable annuity). For long-term risk-averse investors, no other instrument combines guaranteed returns with full EEE tax status.

Can I take a loan against my PPF account?

Yes, PPF loans are available from the beginning of the 3rd financial year to the end of the 6th financial year of account opening. You can borrow up to 25% of the balance at the end of the 2nd year preceding the loan application. Interest rate is 1% per annum above the PPF rate - currently 8.1% (7.1% + 1%). The loan must be repaid within 36 months; if not, the interest rate rises to 6% above PPF rate. While a loan is outstanding, the PPF balance continues to earn interest normally - making this an extremely low-cost personal loan secured against your own savings. A fresh loan can be taken after the first is fully repaid. This is useful for short-term cash needs without disrupting the compounding trajectory of the account.

What happens to a PPF account after 15 years?

At the 15-year maturity mark, you have three choices. First, close the account and withdraw the entire tax-free corpus. Second, extend without fresh contributions: the account stays active, earns PPF interest, and you can withdraw in lump sums - useful if you do not need the money immediately but also do not want to lock in more funds. Third, extend with fresh contributions for another 5-year block: you continue depositing up to ₹1.5 lakh per year, the 80C deduction continues, and the EEE status continues. This third option is highly valuable for pre-retirement investors who have not exhausted their 80C limit elsewhere. Many advisors recommend keeping PPF going indefinitely since guaranteed 7.1% tax-free is hard to beat for the debt portion of a retirement portfolio.

Can I open a PPF account for my child?

Yes. A PPF account can be opened for a minor child by a parent or legal guardian. However, the combined annual deposit limit across the guardian's own PPF account and the minor's account is Rs. 1.5 lakh - not Rs. 1.5 lakh each. Contributions to the minor's account qualify for the guardian's Section 80C deduction. The account is managed by the guardian until the child turns 18, after which the child becomes the account holder. Interest at 7.1% accrues from opening, and the EEE tax status applies. Since PPF matures 15 years from opening, starting a child's account at birth means the corpus is available when the child is 15 - useful for higher education expenses.

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PPF Calculator

Calculate Public Provident Fund maturity amount with year-by-year interest.

About the PPF Calculator

PPF (Public Provident Fund) is a government-backed savings scheme with EEE (Exempt-Exempt-Exempt) tax status - meaning your investment, the interest earned, and the maturity withdrawal are all entirely tax-free. With a 15-year lock-in, up to ₹1.5 lakh in annual contributions, and a government-guaranteed 7.1% interest rate, PPF is one of the most powerful wealth-building tools for salaried Indians.

Unlike FDs (where interest is taxable every year) or equity mutual funds (where gains above ₹1.25 lakh are taxed at 12.5%), PPF has zero tax leakage at any stage. The government guarantees both the principal and the rate - making it the only high-yield instrument with sovereign backing and full EEE status. For a 30% tax bracket investor, 7.1% tax-free is equivalent to earning 10.1% in a taxable FD - a difference that compounds dramatically over 15-25 years.

The real power of PPF is long-term compounding with zero erosion. At ₹1.5 lakh per year over 25 years, your total investment of ₹37.5 lakh grows to approximately ₹1.03 crore at 7.1% - with ₹65.5 lakh being completely tax-free interest. No other zero-risk instrument in India achieves this. Use this calculator to find your PPF maturity amount, plan extensions beyond 15 years, and see how early investing and maximum contributions multiply your corpus.

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EEE Tax Status

80C deduction on investment + tax-free interest + tax-free maturity - no other Indian instrument has all three

Triple exempt

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Government Guarantee

Principal and interest rate guaranteed by Government of India - zero default or market risk

Sovereign-backed

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7.1% Tax-Free

Equivalent to 10.1% pre-tax for 30% bracket investors - consistently beats post-tax FD returns

Beats most FDs

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Partial Withdrawal

Access funds from year 7 onward - withdraw up to 50% of 4-year-ago balance annually

From year 7

PPF Interest Calculation

Interest for year N = Balance at start of year N × (Rate / 100) | Balance at end of year N = Balance at start + Deposit + Interest

Interest calculated on minimum balance between 5th and last day of each month · Annual deposit limit: ₹1,50,000 · Minimum annual contribution: ₹500 · Compounding: Annual

Worked Example

₹1.5 lakh/year in PPF for 25 years at 7.1%

Annual Investment:₹1,50,000 (maximum)

Rate:7.1% p.a.

Duration:25 years

Total invested ≈ ₹37.5 lakh · Maturity amount ≈ ₹1.03 Cr · Tax-free interest ≈ ₹65.5 lakh · Same investment in a taxable FD at 7.1% yields only ≈ ₹84.5 lakh after 30% tax - PPF saves over ₹19 lakh in taxes alone

Tips & Insights

1
Deposit before the 5th of each month to earn interest on that month's contribution. PPF interest is calculated on the minimum balance between the 5th and last day of each month - money deposited after the 5th earns no interest for that month.
2
Deposit the full ₹1.5 lakh in the first week of April. This ensures 12 full months of interest on the annual contribution. Depositing in March instead of April costs you one full year's interest on ₹1.5 lakh - roughly ₹10,650 at current rates, every single year.
3
After the 15-year lock-in, extend in 5-year blocks rather than withdrawing. In extension with contributions, you continue depositing ₹1.5 lakh per year with full 80C benefit and EEE status. In extension without contributions, the full balance continues earning tax-free interest with no fresh deposits - ideal if your 80C limit is already met elsewhere.
4
Partial withdrawal is allowed from the 7th financial year onward. You can withdraw up to 50% of the balance at the end of the 4th year (or preceding year, whichever is lower), once per year. Use this for large planned expenses like a home down payment or education instead of taking an expensive personal loan.
5
PPF loans are available from year 3 to year 6 at just 1% above the PPF rate (currently 8.1%). Far cheaper than personal loans (11-15%) or credit cards (30-42%). The loan must be repaid within 36 months and the PPF balance continues earning interest throughout - making this an extremely efficient emergency credit line.
6
Compare PPF to tax-saving FDs for your 80C allocation. A 5-year tax-saving FD at 7% earns taxable interest (effective 4.9% post-tax at 30% bracket) with a rigid 5-year lock-in. PPF at 7.1% is fully tax-free and can be extended indefinitely. PPF wins clearly for long-term 80C allocation - use tax-saving FDs only when you need the principal back in exactly 5 years.
7
You can open a PPF account for your minor children through a guardian account. Each child's account has its own ₹1.5 lakh annual limit independent of your own account. Starting a child's PPF at birth and investing ₹1.5 lakh per year at 7.1% gives them approximately ₹65 lakh at age 21 - entirely tax-free, with no market risk.

Why this matters for you

PPF fills a specific and irreplaceable role in every Indian's financial plan: it is the only high-yield, zero-risk instrument with sovereign backing, full EEE tax exemption, and a ₹1.5 lakh annual deduction limit. For salaried investors who have already maximized EPF contributions and want additional tax-free compounding, PPF is the natural next step - before any other 80C instrument.

The tax advantage of PPF compounds invisibly but powerfully. At 7.1% over 25 years, ₹1.5 lakh per year grows to ₹1.03 crore. The same amount in a bank FD at 7.1% (taxable) would give only ₹84.5 lakh after 30% tax - a difference of over ₹19 lakh, and that gap widens further if rates or tax brackets rise. This is why financial advisors consistently recommend maxing out PPF before considering taxable instruments for the debt portion of a portfolio.

Despite the 15-year lock-in, PPF is more liquid than it appears. The partial withdrawal facility from year 7, the loan facility from years 3-6, and the option to extend indefinitely after maturity give it flexibility most people overlook. For anyone with a 10+ year horizon for any goal - retirement, a child's higher education, or long-term wealth preservation - PPF is the most efficient and reliable foundation available in India.