Last updated: 2026-10-21
PPF at a glance
| Interest rate | 7.1% a year (October–December 2026), compounded yearly |
|---|---|
| Deposit | ₹500 to ₹1,50,000 a year, in one go or in parts |
| Lock-in | 15 years, then extendable in blocks of 5 years |
| Tax | Deposits count for 80C (old regime). Interest and maturity are tax-free. |
| Partial withdrawal | From year 7, once a year |
| Loan | From year 3 to year 6 |
| Safety | Backed by the Government of India |
How PPF interest is calculated
Interest is worked out on the lowest balance between the 5th and the last day of each month, and added once a year on 31 March. That's why depositing before 5 April earns you a full year's interest on that money.
Example: ₹1.5 lakh a year for 15 years at 7.1% grows to about ₹40.68 lakh. You deposit ₹22.5 lakh and earn about ₹18.18 lakh in tax-free interest.
Frequently asked questions
What is the PPF interest rate now?
7.1% a year for October–December 2026. The government reviews it every quarter, and it has stayed at 7.1% since April 2020.
Is PPF better than an FD?
For long-term saving, usually yes. PPF interest is completely tax-free, while FD interest is taxed at your slab rate. A 7.1% tax-free return is worth more than a 9% taxable FD for someone in the 30% bracket. The trade-off is the 15-year lock-in.
Can I get the 80C benefit in the new regime?
No. 80C deductions only apply in the old regime. PPF interest and maturity stay tax-free in both regimes, though.
What happens after 15 years?
You can withdraw everything, or extend the account in blocks of 5 years, with or without new deposits. Apply for extension within a year of maturity.
See how a monthly SIP could grow over the same period.