The Public Provident Fund (PPF) is a government-backed savings scheme with tax-free interest and a 15-year lock-in. Enter your yearly deposit to see your maturity value and the balance at the end of every year.
Current PPF interest rate
The PPF rate is 7.1% per year for October–December 2026. The government reviews small savings rates every quarter, but the PPF rate has stayed at 7.1% for several years. Interest is compounded yearly and credited on 31 March.
Key PPF rules
- Deposit: minimum ₹500, maximum ₹1.5 lakh per financial year.
- Tenure: 15 years, then extendable in blocks of 5 years, with or without fresh deposits.
- Tax: EEE status – deposits qualify for the 80C deduction (old regime), and interest and maturity are tax-free.
- Interest timing: interest for a month is calculated on the lowest balance between the 5th and the end of the month, so deposit before the 5th – ideally before 5 April for the full year’s interest.
- Withdrawals: partial withdrawals are allowed from year 7; loans against PPF from year 3 to 6.
Example
Depositing ₹1.5 lakh every year before 5 April for 15 years at 7.1% gives a maturity value of about ₹40.68 lakh, of which ₹22.5 lakh is your deposits and about ₹18.18 lakh is tax-free interest. Extending for another 5 years with deposits takes it to roughly ₹66.6 lakh.
PPF vs other options
| Option | Return | Tax on returns | Risk |
|---|---|---|---|
| PPF | 7.1% | Tax-free | Government-backed |
| Bank FD | ~6–7.5% | Taxed at slab rate | Low |
| Equity SIP | Market-linked | Capital gains tax | Higher |
See how the same money might grow in a market-linked fund with the step-up SIP calculator, or in a bank deposit with the FD calculator.
PPF maturity for different yearly deposits (7.1%, 15 years)
| Yearly deposit | Total deposited | Maturity value | Interest earned |
|---|---|---|---|
| ₹12,000 (₹1,000/month) | ₹1,80,000 | ≈ ₹3.25 lakh | ≈ ₹1.45 lakh |
| ₹50,000 | ₹7,50,000 | ≈ ₹13.56 lakh | ≈ ₹6.06 lakh |
| ₹1,00,000 | ₹15,00,000 | ≈ ₹27.12 lakh | ≈ ₹12.12 lakh |
| ₹1,50,000 | ₹22,50,000 | ≈ ₹40.68 lakh | ≈ ₹18.18 lakh |
The power of extensions
After 15 years you can extend PPF in 5-year blocks. With ₹1.5 lakh a year:
- 20 years: ≈ ₹66.6 lakh
- 25 years: ≈ ₹1.03 crore
- 30 years: ≈ ₹1.54 crore
Because interest is tax-free, these are your real take-home figures – an equivalent taxable investment would need a noticeably higher return to match them for someone in the 30% bracket.
How PPF interest is calculated
- Each month, interest is calculated on the lowest balance between the 5th and the last day of the month.
- Monthly interest is added up and credited once a year on 31 March.
- Next year’s interest is then calculated on the new, larger balance – that’s the compounding.
Depositing on the 6th instead of the 4th of April costs you an entire month of interest on that deposit, which is why the calculator assumes deposits before 5 April.
Who should invest in PPF?
- People who want guaranteed, tax-free returns for long-term goals such as retirement.
- Those in the old tax regime who need 80C deductions.
- Self-employed people without EPF who want a disciplined retirement account.
- Investors balancing risky equity holdings with a safe fixed-income core.
Withdrawals and loans
- Loans: from the 3rd to the 6th financial year, up to 25% of the balance at the end of the second preceding year.
- Partial withdrawals: from the 7th year, once a year, up to 50% of a specified earlier balance.
- Premature closure: allowed after 5 years for specific reasons such as serious illness or higher education, with a 1% interest penalty.
Real-life scenarios
- Monthly saver: Depositing ₹5,000 every month (₹60,000 a year) for 15 years grows to roughly ₹16 lakh.
- Retirement top-up: A 35-year-old investing ₹1.5 lakh a year until 60 (25 years, with extensions) builds about ₹1.03 crore tax-free.
- Child’s education: Parents investing ₹1 lakh a year from a child’s birth have about ₹27 lakh by age 15.
Related calculators
- FD calculator – compare taxable deposits
- Step-up SIP calculator – market-linked growth
- Income tax calculator – value of the 80C deduction
FAQs
Can NRIs open a PPF account?
NRIs can’t open new PPF accounts, but an account opened while resident can continue until maturity.
Can I have more than one PPF account?
No, only one per person (plus one as guardian for a minor). The ₹1.5 lakh limit covers both combined.
Can I deposit monthly instead of yearly?
Yes. Any number of deposits is allowed within the ₹1.5 lakh yearly limit. Lump sums before 5 April earn the most interest.
What happens if I miss a year’s deposit?
The account becomes inactive. You can revive it by paying ₹500 for each missed year plus a ₹50 penalty per year.