Overview
The Public Provident Fund (PPF) is one of India's most trusted government-backed long-term savings schemes. Launched to encourage disciplined savings among salaried individuals, self-employed professionals, and small investors, PPF combines guaranteed returns, sovereign security, and triple tax exemption - making it a cornerstone of personal financial planning for millions of Indians.
Whether you are building a retirement corpus, planning your child's education, or simply looking for a risk-free investment with tax benefits, PPF continues to deliver in 2026.
PPF Interest Rate 2026 (FY 2026–27): What You Need to Know
Current Rate: 7.1% Per Annum
The PPF interest rate for Q1 FY 2026–27 (April–June 2026) remains unchanged at 7.1% per annum, compounded annually. The Finance Ministry confirmed this on March 30, 2026, keeping the rate steady for the seventh consecutive year since the last revision on April 1, 2020.
| Quarter | Financial Year | PPF Interest Rate |
| April - June 2026 | FY 2026–27 | 7.1% p.a. |
| January - March 2026 | FY 2025–26 | 7.1% p.a. |
| October - December 2025 | FY 2025–26 | 7.1% p.a. |
| July - September 2025 | FY 2025–26 | 7.1% p.a. |
Historical context: Before April 2020, PPF offered 7.9% interest (July 2019 – March 2020) and 8.0% (October 2018 – June 2019).
Also Read: Post Office Monthly Income Scheme Interest Rate 2026
How Is PPF Interest Calculated?
- Interest is compounded annually and credited to your account on 31st March every year.
- Calculation is based on the lowest balance between the 5th and the last day of each month.
Pro tip: Deposit your PPF contribution before the 5th of each month (ideally in April for the full year) to maximise interest earnings.
PPF Tax Rules 2026: EEE Status Explained
PPF enjoys Exempt-Exempt-Exempt (EEE) status — one of the most tax-efficient classifications available for an investment instrument in India.
The Three Tax Exemptions
| Stage | Tax Treatment |
| Contribution | Deduction up to ₹1.5 lakh/year under Section 80C (old tax regime) |
| Interest Earned | Fully exempt from income tax (both regimes) |
| Maturity Amount | Fully tax-free, including principal and interest |
Important Tax Rules for 2026
- Old Tax Regime: Contributions up to ₹1.5 lakh per year qualify for deduction under Section 80C (Section 123 under the Income Tax Act, 2025).
- New Tax Regime: The Section 80C deduction on PPF contributions is not available. However, the interest earned and the maturity amount remain fully tax-free under both regimes.
- No TDS: Interest is credited directly without any Tax Deducted at Source (TDS).
- PF Contributions Above ₹2.5 Lakh: Income tax applies to interest earned on provident fund contributions exceeding ₹2.5 lakh in a financial year, as per the current tax rules — though the standard PPF contribution limit of ₹1.5 lakh keeps most investors comfortably below this threshold.
Who Can Open a PPF Account?
- Any resident Indian individual - salaried, self-employed, or otherwise
- A parent or guardian can open an account on behalf of a minor
- One account per person is allowed across the country (Post Office or Bank)
- HUFs (Hindu Undivided Families) and NRIs cannot open new PPF accounts
- Joint accounts are not permitted
NRI Note: NRIs who opened PPF accounts before becoming NRIs can continue their accounts until maturity. On maturity, they must withdraw and close the account — extension is not permitted for NRIs.
PPF Account Features at a Glance
| Feature | Details |
| Minimum Investment | ₹500 per year |
| Maximum Investment | ₹1,50,000 per year |
| Tenure | 15 years (extendable in blocks of 5 years) |
| Interest Rate | 7.1% p.a. (Q1 FY 2026–27) |
| Risk | Zero (Government of India guaranteed) |
| Tax Status | EEE (Exempt-Exempt-Exempt) |
| Loan Facility | Available from Year 2 to Year 6 |
| Partial Withdrawal | Allowed from Year 6 onwards |
| Premature Closure | Allowed after 5 years under specific condition |
Where to Open a PPF Account in 2026?
You can open a PPF account at:
- Any Post Office in India
- Nationalised banks: SBI, PNB, Bank of Baroda, Canara Bank, and others
- Authorised private banks: HDFC Bank, ICICI Bank, Axis Bank, and others
Opening a PPF Account Online (Step-by-Step)
- Log into your bank's Internet Banking or Mobile Banking platform
- Navigate to "Open a PPF Account"
- Select "Self Account" (or "Minor Account" if opening for a child)
- Fill in the required details and complete Aadhaar-based eKYC
- Set up your contribution amount and make the first deposit
New in 2026: PPF accounts can now be opened using Aadhaar-based biometric eKYC. Deposits and withdrawals can also be processed through this paperless facility effective July 27, 2026.
PPF Withdrawal Rules 2026
Understanding withdrawal rules is critical before investing. Here's a complete breakdown:
Full Maturity Withdrawal (After 15 Years)
- The entire corpus (principal + interest) can be withdrawn tax-free at maturity.
- Submit the withdrawal form at your bank or post office.
Partial Withdrawal (From Year 6 Onwards)
- Partial withdrawals are permitted from the 6th financial year of the account.
- You can withdraw up to 50% of the balance at the end of the 4th year or the year preceding the withdrawal, whichever is lower.
- Only one partial withdrawal is allowed per financial year.
Extension Rules (After 15 Years)
PPF accounts can be extended in blocks of 5 years after maturity. Two options exist:
| Extension Type | Contributions | Withdrawal Limit |
| With Contributions | Allowed (submit Form H within 1 year of maturity) | Up to 60% of balance over the 5-year block |
| Without Contributions | No new deposits | Full balance can be withdrawn at any time |
Important: If you fail to submit Form H within 1 year of maturity, you cannot make fresh contributions. Any irregular deposits neither earn interest nor qualify for Section 80C deductions.
Premature Closure (After 5 Years)
Premature closure is permitted after completing 5 financial years, only under these specific circumstances:
- Medical emergency: Treatment of a life-threatening illness for the account holder or dependents (supporting documents required)
- Higher education: For the account holder or dependents
- Change in residency status: If the account holder becomes an NRI
- A penalty of 1% per annum is deducted from the applicable interest rate on premature closure.
Loan Against PPF
PPF allows account holders to take loans against their balance:
- Eligibility: From the 2nd financial year up to the 6th financial year.
- Loan Amount: Up to 25% of the balance at the end of the second preceding financial year
- Interest Rate: 1% above the prevailing PPF interest rate
- Repayment: Must be repaid within 36 months
PPF vs Other Tax-Saving Instruments in 2026
| Instrument | Returns | Tax on Returns | Risk | Lock-in |
| PPF | 7.1% | Tax-free (EEE) | Zero | 15 years |
| ELSS (Mutual Funds) | Market-linked | LTCG above ₹1 lakh taxable | Market risk | 3 years |
| NSC | 7.7% | Interest taxable | Zero | 5 years |
| Senior Citizen Savings Scheme | 8.2% | Interest taxable | Zero | 5 years |
| Bank FD (5-year tax-saving) | 6.5–7.5% | Interest taxable | Low | 5 years |
PPF stands out with its combination of zero risk, sovereign guarantee, and full tax-free returns at maturity — unmatched by most instruments in the same category.
Also Read: Senior Citizen Saving Scheme vs Fixed Deposits 2026
How Much Can You Accumulate in PPF? (Illustrative Examples)
Assuming a consistent 7.1% interest rate:
| Annual Deposit | Tenure | Approximate Maturity Value |
| ₹50,000 | 15 years | ₹13.5 lakh |
| ₹1,00,000 | 15 years | ₹27 lakh |
| ₹1,50,000 | 15 years | ₹40.7 lakh |
| ₹1,50,000 | 25 years (extended) | ₹1.03 crore |
Note: These are approximate figures. Use a PPF Calculator for personalised projections.
Also Read: Post Office Fixed Deposit Scheme 2026: Safe Investment With High Returns
FAQs
What is the PPF interest rate for 2026?
The PPF interest rate is 7.1% per annum for Q1 FY 2026–27 (April–June 2026), unchanged since April 2020.
Is PPF interest taxable in 2026?
No. PPF interest is fully tax-free under both the old and new tax regimes.
Can I claim Section 80C deduction on PPF under the new tax regime?
No. The Section 80C deduction on PPF contributions is available only under the old tax regime.
Can an NRI open a PPF account in 2026?
No. NRIs cannot open new PPF accounts. Existing accounts opened before becoming an NRI can be continued until maturity.
What is the maximum I can invest in PPF per year?
The maximum contribution is ₹1,50,000 per financial year.
Can I withdraw PPF before 15 years?
Yes, but only after completing 5 financial years and under specific conditions (medical, education, change in residency), with a 1% interest penalty.
Is the maturity amount from PPF tax-free?
Yes. The entire maturity amount - including both principal and accumulated interest - is fully exempt from income tax.
How is PPF interest calculated?
Interest is calculated on the lowest balance between the 5th and last day of each month, compounded annually, and credited on 31st March.
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