Public Provident Fund Scheme 2026: Turn 1.5 Lakh a Year into 66.58 Lakh

Public Provident Fund (PPF) is a government-backed, risk-free investment scheme designed to provide long-term financial returns with tax-free benefits.

Benefits of PPF

• There is zero market risk as it is backed by Government of India. Your investment is fully protected regardless of economic conditions.
• It enjoys Exempt-Exempt-Exempt status under Section 80C as Investment, interest, and maturity all tax-free.
• There is no TDS on interest, making it more efficient than many fixed-income instruments.
• PPF is ideal for long-term goals such as retirement or children’s education with strong compounding benefits.

Investment Limits, Eligibility and Interest Rates of PPF

Deposit Limit

• Minimum: ₹500 per financial year
• Maximum: ₹1.5 lakh per financial year

Eligibility

• Only one PPF account allowed for an individual.
• If minor than one account can be opened as a guardian.

Note: Joint accounts are not allowed.

Interest Rate

7.1% per annum.

Is Deduction Allowed?

Yes, you can claim deduction under section 80C or 123 up to ₹1.5 lakh

Withdrawals or Maturity Rules of PPF

Lock-in Period

PPF has a fixed lock-in period of 15 years, calculated from the end of the financial year in which the account is opened.

Partial Withdrawals allowed After 5 years

After 5 years, partial withdrawals are allowed once per year. The maximum withdrawal is 50% of the lower balance from either:

• The end of the 4th year preceding withdrawal, or
• The previous financial year

Maturity

After 15 years, you can:

• Withdraw the full amount, or
• You can extend the account in blocks of 5 years (with or without Deposits)

Extension Option Allowed

Within 1 year from the maturity

• Withdrawal During Extension: You can withdraw up to 60% at start of 5 year Block.
• Extension Rules: After each 5 year block you can extend another 5 years.

Premature Closure of PPF

• Allowed before 15 years but after 5 years only for specific reasons such as medical emergencies or higher education or convert to NRI Status with a 1% interest penalty.
• Proof Required: Doctor or Hospital Bill, Admission fee receipt, Passport, Visa etc.

In case of Death of Account Holder

• Account must be permanently closed. Nominee or legal heir must close the account and claim the amount but note he/she cannot continue the PPF Account.
• After the death of account holder all deposits are stopped immediately and interest will be paid on balance till the end of previous month of payment.

How To Turn 1.5 Lakh a Year into 66.58 Lakh?

By investing ₹1.5 lakh annually for 20 years (including a 5-year extension), you can build a corpus of approximately ₹66.58 lakh at 7.1% interest. 

Here,

Investment made is ₹30 lakh

Total Interest earned is ₹36.58 lakh

After 20 years amount becomes ₹66.58 lakh

PPF is a safe, tax-efficient investment ideal for long-term wealth creation, with higher returns when held beyond 15 years due to compounding.