What is PPF?
Public Provident Fund is a government-backed long-term savings scheme offering guaranteed, tax-free returns. It falls under the EEE (Exempt-Exempt-Exempt) category — investment, interest, and maturity are all tax-free.
PPF Interest Rate 2026
Current rate: 7.1% p.a. (compounded annually). Revised quarterly by the government. Historically ranged from 7–8.8%.
PPF Rules & Limits
- Minimum deposit: ₹500/year
- Maximum deposit: ₹1.5 lakh/year
- Lock-in: 15 years (partial withdrawal from 7th year)
- Extension: 5-year blocks after maturity
Tax Benefits of PPF
Yearly deposits up to ₹1.5 lakh qualify for Section 80C deduction. Interest earned and maturity amount are completely tax-free. PPF is one of the safest EEE instruments available.
PPF Maturity Calculation Example
Investing ₹12,500/month (₹1.5L/year) for 15 years at 7.1%: Total invested = ₹22.5 lakh, Interest = ₹18.18 lakh, Maturity = ₹40.68 lakh (completely tax-free).
PPF vs NPS vs ELSS
- PPF: Guaranteed returns, EEE, 15-year lock-in
- NPS: Market-linked, partial tax on withdrawal, retirement focus
- ELSS: Equity returns, 3-year lock-in, LTCG taxable above ₹1.25L