The Public Provident Fund (PPF) is India's most trusted long-term savings scheme — backed by the Government of India, completely tax-free, and offering guaranteed returns. For anyone looking to build a retirement corpus or long-term wealth with zero risk, PPF remains the gold standard. This guide explains every rule, benefit, and strategy you need to know.
Key Features of PPF (2026)
| Feature | Details |
|---|---|
| Current Interest Rate | 7.1% p.a. (compounded annually, reviewed quarterly by GoI) |
| Lock-in Period | 15 years (extendable in 5-year blocks) |
| Minimum Annual Deposit | ₹500 |
| Maximum Annual Deposit | ₹1,50,000 (₹1.5 lakhs) |
| Tax Status | EEE — Exempt-Exempt-Exempt (investment, interest, maturity all tax-free) |
| Premature Closure | Only after 5 years for medical or education emergencies |
| Loan Facility | Available from Year 3 to Year 6, up to 25% of balance |
| Withdrawal Facility | Partial withdrawal from Year 7 onwards |
Why EEE Status Makes PPF Extraordinary
PPF is one of the few instruments with triple tax exemption:
- Exempt at investment: Contributions qualify for deduction under Section 80C (up to ₹1.5 lakh/year)
- Exempt during growth: Interest earned each year is completely tax-free — not even added to income
- Exempt at maturity: The entire maturity amount is received tax-free, including all accumulated interest
How Much Will ₹1.5 Lakhs/Year Grow in 15 Years?
That's ₹18+ lakhs in completely tax-free interest on an investment eligible for 80C deductions — a double tax benefit unavailable in almost any other product.
Partial Withdrawal Rules
From the 7th financial year, you can withdraw up to 50% of the balance at the end of the 4th preceding year (or the 2nd preceding year's balance, whichever is lower). This provides a safety valve for major expenses without breaking the account.
What Happens After 15 Years?
You have three choices at maturity:
- Full withdrawal — take the entire tax-free corpus
- Extend with contributions — continue investing for 5 more years at the same rate, compounding further
- Extend without contributions — keep the corpus earning 7.1% tax-free without adding more money
Use our PPF Calculator to model all three scenarios and see exactly how your corpus grows over 15, 20, or 25 years.
Frequently Asked Questions
Can an NRI open a PPF account?
No. NRIs are not eligible to open new PPF accounts. However, if a resident becomes an NRI after opening an account, they can continue until maturity but cannot extend beyond 15 years.
Can I open a PPF account for my child?
Yes — parents can open a PPF account for minor children (below 18). However, both the parent's and child's accounts combined cannot exceed the ₹1.5 lakh annual deposit limit.
Is the PPF interest rate fixed for 15 years?
No — the GoI revises the rate quarterly. Once deposited, your money earns the prevailing rate each year, not a locked-in rate. Historically, the rate has ranged from 7.1% to 12% over the decades.