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Public Provident Fund is one of the safest government backed long-term investment options as it offers guaranteed returns, tax benefits under Section 80C, and tax-free maturity.
Before investing you must avoid these common mistakes to earn the maximum benefit:
- Deposit before the 5th of every month to earn interest for the full month.
- Do not deposit more than ₹1.5 lakh in a financial year, as the excess amount does not earn interest or tax benefits.
- To keep your PPF account active, you must contribute at least ₹500 every year.
- Remember that PPF has a 15-year lock-in, so invest only if you can stay invested for the long term.
Who Can Open Public Provident Fund Account in 2026?
Resident Indian individuals, including senior citizens, are eligible to open a PPF account.
An individual can hold one PPF account in their own name and one additional account on behalf of a minor.
Note: Non-Resident Indians (NRIs) are not eligible to open PPF account.
PPF Deposit Limits in 2026
- Minimum deposit: ₹500 per annum
- Maximum deposit: ₹1.5 lakh in a financial year.
Tenure And Interest Rate
| Tenure | Interest Rate |
| 15 years (extendable in blocks of 5 years) | 7.1% p.a. |
Five Costly PPF Mistakes to Avoid
Missing Minimum Deposit Amount
Yearly minimum deposit amount is ₹500 but if you fail to deposit the same your PPF account may become discontinued.
Consequence of missing the minimum
The account is marked discontinued and needs a penalty payment to be regularized/reactivated.
Depositing Amount After the 5th of the Month
PPF interest is calculated every month, but credited to your account on 31st March every year. Each month's interest is based on the lowest balance in your PPF Account:
- Deposit on or before the 5th → that amount earns interest starting that same month.
- Deposit after the 5th → that amount starts earning interest from the next month.
For Example
| Month | Opening Balance | Deposit Date | Deposit Amount | Balance on 5th | Amount Eligible for Interest for that Month |
| July | ₹80,000 | 04-07-26 | ₹20,000 | ₹1,00,000 | ₹1,00,000 |
| August | ₹20,000 | 06-08-26 | ₹30,000 | ₹50,000 | ₹20,000 |
Choosing Monthly Deposits Over an Early Lumpsum
If you deposit single annual lumpsum in early April, that entire amount earns a full year's interest. Spreading the same total across monthly deposits means later installments - resulting in lower overall interest as it earn interest for fewer months.
Closing the PPF Account Prematurely Without Understanding the Penalty
Premature closure of a PPF account are permitted only after the 5‑year lock-in period for medical emergency, higher education or NRI status. But if you close early, a 1% penalty is deducted from your interest rate for the entire investment period.
| Normal PPF Interest | Premature Closer Interest |
| 7.1% | 6.1% |
Partial Withdrawal Eligibility
Partial withdrawals from PPF are allowed any time but after the 5-year lock-in period. The maximum you can withdraw is 50% of your "eligible" balance. To withdraw in the 6th year, you have to compare the balance. The eligible balance is calculated as:
The lower of:
- Balance at the end of the fourth preceding financial year, or
- Balance at the end of the immediately preceding financial year.
PPF Maturity After 15 Years - What To Do Next?
At maturity, you have three choices:
- Close the account and withdraw the entire maturity amount.
- Continue without further deposits in blocks of 5 years - your existing balance keeps earning interest, no additional money required.
- Extend with new deposits for another 5-year block, continuing to contribute and earn interest
Explore More in Details - Public Provident Fund Scheme 2026
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