Public Provident Fund (PPF) 2026
The 15-year, tax-free, government-backed savings account for long-term goals.
Rates for July–September 2026 (Q2 FY 2026-27) · Updated 27 September 2026What is Public Provident Fund (PPF)?
The Public Provident Fund is a long-term small-savings scheme introduced in 1968 and now governed by the Public Provident Fund Scheme, 2019. You can open it at any post office or an authorised bank branch. Contributions of ₹500 to ₹1.5 lakh can be made every financial year for 15 years; interest is fixed by the Government each quarter, compounded annually and completely tax-free. Because the principal and interest are backed by the Government of India, PPF is one of the safest long-term instruments available to Indian residents.
PPF at a glance
| Particular | Details |
|---|---|
| Current interest rate | 7.1% p.a. (Jul–Sep 2026) |
| Interest calculation | On the lowest balance between the 5th and the last day of each month |
| Interest credit | Once a year, on 31 March |
| Tenure | 15 full financial years from the end of the year of opening |
| Deposit limit | Min ₹500, max ₹1.5 lakh per FY (combined across own + minor accounts) |
| Number of deposits | Any number of instalments in multiples of ₹50 |
| Loan facility | From 3rd to 6th financial year |
| Partial withdrawal | Once per FY from the 7th financial year |
| Premature closure | After 5 FYs, only on specified grounds; 1% interest penalty |
| Extension | Unlimited 5-year blocks, with or without deposits |
| Where to open | Post office, SBI, public-sector and major private banks |
| Tax status | EEE — deduction, tax-free interest, tax-free maturity |
Government-notified terms for July–September 2026 (Q2 FY 2026-27). Verify the latest notification before investing.
Features & benefits of PPF
Principal and interest are backed by the Government of India; there is no deposit-insurance cap like bank deposits.
Interest is exempt every year, so the full amount compounds without a tax drag.
Deposit once a year or in several instalments — there is no fixed monthly commitment.
A PPF balance cannot be attached under a court decree for debts (tax recovery by the IT department is an exception).
Liquidity through loans (years 3–6) and partial withdrawals (from year 7).
Continue beyond 15 years in 5-year blocks, with or without fresh contributions.
Eligibility — who can invest?
- Resident Indian individuals (adults) — only one PPF account per person.
- A parent / guardian can open one account on behalf of each minor child; limit is combined with the guardian’s own account.
- NRIs cannot open a new account. A resident who becomes an NRI may continue the existing account till maturity (no extension).
- HUFs cannot open new PPF accounts.
- Joint accounts are not allowed.
How does PPF work?
- Deposit any amount between ₹500 and ₹1.5 lakh in a financial year — lump sum or in instalments.
- Interest for each month is calculated on the lowest balance between the 5th and the end of the month. Depositing before the 5th of the month (ideally before 5 April) earns interest for that whole month.
- Interest is credited on 31 March and compounds from the next year.
- The account matures after 15 complete financial years counted from the end of the year in which it was opened — so an account opened in June 2026 matures on 1 April 2042.
- On maturity you can close the account, extend it with deposits (Form 4 within one year), or let it continue without deposits.
Tax benefits of PPF
| Stage | Tax treatment |
|---|---|
| Contribution | Deduction up to ₹1.5 lakh under Section 80C (Section 123 of the Income-tax Act, 2025 from tax year 2026-27) — only in the old tax regime |
| Interest | Fully exempt every year (Section 10(11)) |
| Maturity / withdrawal | Fully exempt |
| TDS | None |
| Reporting | Show interest as exempt income in your ITR |
Section 80C of the Income-tax Act, 1961 is Section 123 of the Income-tax Act, 2025 from tax year 2026-27. Deductions apply only in the old tax regime.
Withdrawal, premature closure & maturity rules
| Situation | Rule |
|---|---|
| Partial withdrawal | Allowed once every financial year from the 7th FY (after 5 completed years). Maximum = 50% of the balance at the end of the 4th preceding year or the immediately preceding year, whichever is lower. Form 2. |
| Premature closure | After 5 financial years only for: life-threatening illness of the holder / spouse / dependent children / parents, higher education of the holder or dependent children, or change of residency status. Interest is recalculated at 1% below the applicable rate. |
| Maturity | Full balance paid on Form 2 after 15 years; or extend in 5-year blocks. |
| Death of holder | Nominee / legal heir receives the balance; the account cannot be continued by the nominee. |
At maturity
| Option | What happens |
|---|---|
| Close | Withdraw the whole balance tax-free (Form 2 / bank request) |
| Extend with deposits | Submit Form 4 within 1 year of maturity. Up to 60% of the balance at the start of the block can be withdrawn during the 5-year block (one withdrawal per year) |
| Extend without deposits | Default if nothing is submitted. Interest keeps accruing, any amount can be withdrawn once a year |
Loan against PPF
| Parameter | Rule |
|---|---|
| Eligibility window | From the 3rd FY to the end of the 6th FY (i.e. until partial withdrawal becomes available) |
| Loan amount | Up to 25% of the balance at the end of the 2nd year preceding the year of application |
| Interest on loan | 1% p.a. above the prevailing PPF rate (i.e. 8.1% today) — 6% if repaid beyond 36 months |
| Repayment | Principal within 36 months, then interest in max two instalments |
| Second loan | Allowed only after the first loan (principal + interest) is fully repaid, and before the end of the 6th FY |
PPF returns — worked examples
| Yearly deposit (at start of FY) | Total invested (15 yrs) | Maturity value @7.1% | Tax-free gain |
|---|---|---|---|
| ₹12,000 (₹1,000/month) | ₹1,80,000 | ₹3,25,457 | ₹1,45,457 |
| ₹50,000 | ₹7,50,000 | ₹13,56,070 | ₹6,06,070 |
| ₹1,00,000 | ₹15,00,000 | ₹27,12,139 | ₹12,12,139 |
| ₹1,50,000 (max) | ₹22,50,000 | ₹40,68,209 | ₹18,18,209 |
Illustration assumes the 7.1% rate stays constant for 15 years and deposits are made before 5 April every year. Actual maturity changes whenever the Government revises the quarterly rate.
PPF calculator
How to open / invest in PPF
- Choose a post office or authorised bank (many banks allow online opening through net banking).
- Fill Form 1 (account opening) with nominee details.
- Submit KYC: Aadhaar and PAN, plus photograph.
- Deposit at least ₹500 by cash, cheque or online transfer.
- Collect the passbook / note your PPF account number in net banking.
- Set a yearly reminder (or standing instruction) to deposit before 5 April for maximum interest.
Documents required
- Aadhaar (mandatory for small-savings accounts)
- PAN card (or Form 60 where applicable)
- Passport-size photographs
- Account opening form (Form 1) with nomination
- Birth certificate of the minor & guardian KYC for a minor account
Important forms
| Form | Purpose |
|---|---|
| Form 1 | Account opening |
| Form 2 | Partial withdrawal / closure on maturity |
| Form 3 | Loan against PPF |
| Form 4 | Extension with deposits |
| Form 5 | Premature closure |
| Nomination form | Add / change nominee (up to 4 nominees with shares) |
Advantages & limitations
- Highest-safety, tax-free long-term return
- EEE status in the old tax regime
- Balance is protected from creditors
- Flexible deposits — no fixed monthly obligation
- Loan and partial withdrawal for mid-term needs
- 15-year lock-in with restricted liquidity
- ₹1.5 lakh annual cap
- Rate can be revised every quarter
- No joint accounts; NRIs cannot open
- Returns may trail equity over very long periods
Mistakes to avoid
- Depositing after the 5th of the month and losing that month’s interest
- Missing the ₹500 minimum and letting the account become discontinued (₹50 penalty per year to revive)
- Opening a second account in your own name — it will be closed without interest
- Exceeding ₹1.5 lakh across your own and your child’s accounts — the excess earns no interest
- Forgetting to submit Form 4 within a year of maturity when you want to keep depositing
PPF vs other saving schemes
| Scheme | Rate | Tenure | Minimum | Tax |
|---|---|---|---|---|
| PPF | 7.1% p.a. | 15 years + 5-year extension blocks | ₹500 per financial year | EEE |
| SSY | 8.2% p.a. | 21 years from opening (deposits for 15 years) | ₹250 per financial year | EEE |
| NSC | 7.7% p.a. | 5 years | ₹1,000 | EET (reinvested interest deductible) |
| EPF | 8.25% p.a. (FY 2025-26) | Till retirement (58) | 12% of basic + DA | EEE (conditions apply) |
| VPF | 8.25% p.a. (same as EPF, FY 2025-26) | Linked to your EPF account | Any amount above the 12% statutory share | EEE (₹2.5 lakh interest rule applies) |
Frequently asked questions
Can I have a joint PPF account?
No. PPF is only in a single name. You may add up to four nominees.
What happens if I miss the ₹500 deposit in a year?
The account becomes discontinued. Revive it by paying ₹500 for every missed year plus a ₹50 penalty per year. A discontinued account is not eligible for loans or withdrawals.
Can NRIs invest in PPF?
An NRI cannot open a new account. If you opened it as a resident, you can continue to contribute till maturity but cannot extend it.
Is the PPF interest rate fixed for 15 years?
No. The rate is notified every quarter and applies to the entire balance for that period.
Can I transfer PPF from a post office to a bank?
Yes. Submit a transfer request at the existing office; the account, balance and history move to the new branch free of cost.
Can grandparents open a PPF for a grandchild?
Only a parent or legal guardian can open a minor’s PPF account.
Does PPF count in the new tax regime?
Interest and maturity remain tax-free in both regimes, but the ₹1.5 lakh deduction is available only in the old regime.
Can I close PPF before 15 years?
Only after 5 financial years and only for illness, higher education or change of residency — with a 1% interest reduction.
Information is for education and comparison. Interest rates are notified by the Government every quarter and scheme rules can change — confirm with India Post, your bank, EPFO or PFRDA before investing. FinancePortal is not a financial or tax adviser.