PPF interest rate 2026: 7.1%, rules, limits and maturity value

Quick answer: The PPF interest rate is 7.1% a year for October–December 2026 (Q3 FY27), unchanged for many quarters. You can deposit ₹500 to ₹1.5 lakh per financial year for 15 years. Deposits qualify for the old-regime 80C deduction (now section 123), and both interest and maturity are tax-free — the "EEE" status. Investing ₹1.5 lakh every year at 7.1% grows to about ₹40.7 lakh in 15 years.

Key takeaways

• Rate: 7.1%, compounded yearly, reviewed every quarter by the government.
• Deposit before the 5th of the month to earn interest for that month.
• Tax-free interest and maturity, even in the new tax regime — only the deduction is old-regime-only.
• Partial withdrawals from year 7; loans in years 3–6.
• After 15 years, extend in 5-year blocks — with or without new deposits.

PPF is one of India's most trusted long-term savings options: government-backed, tax-free and simple. It isn't the highest-return product, but its safety and tax status make it a solid base for retirement and children's goals. Here's everything you need to know — rates, rules, maturity value, withdrawals, loans and smart tips.

#Current PPF interest rate

The rate is set by the Ministry of Finance every quarter along with other small savings schemes. It has stayed at 7.1% since April 2020.

How it compares (Q3 FY27)

For someone in the 30% tax bracket, a 7.1% tax-free return is like a ~10.1% taxable return.

#PPF rules at a glance

#The 5th-of-the-month rule

Interest for each month is calculated on the lowest balance between the 5th and the last day of that month. So:

• Deposit on or before the 5th → that month earns interest.
• Deposit on the 6th or later → that month's interest is lost for that deposit.

Tip: If you invest the full ₹1.5 lakh once a year, deposit it between 1 and 5 April. You earn interest on it for all 12 months.

#PPF maturity value: what ₹1.5 lakh a year becomes

Assuming 7.1% for the full period and the deposit made by 5 April each year:

The rate can change quarterly, so treat these as estimates. Notice how the extra 10 years more than double the interest — compounding works best at the end. See compound interest explained.

#Tax benefits (EEE)

1. Exempt on deposit: up to ₹1.5 lakh a year deductible under the old regime (section 80C under the old Act, section 123 under the Income-tax Act, 2025).
2. Exempt on interest: yearly interest is tax-free.
3. Exempt on maturity: the full amount is tax-free.

Good to know: Even if you use the new tax regime, PPF interest and maturity stay tax-free. You only lose the deduction on deposits. See new vs old tax regime.

#Partial withdrawals

• Allowed from the 7th financial year (after 5 full years from the end of the year you opened).
• Once a year.
• Up to 50% of the balance at the end of the 4th year before the withdrawal year, or the end of the previous year — whichever is lower.
• Tax-free.

#Loan against PPF

• Available from the 3rd to the 6th financial year.
• Up to 25% of the balance at the end of the second year before the year you apply.
• Interest: 1% above the PPF rate (currently 8.1%), as long as you repay within 36 months.
• Only one loan at a time; a second loan only after repaying the first.

#Premature closure

Allowed after 5 years only for specific reasons:

• Serious illness of the account holder, spouse, children or parents
• Higher education of the account holder or children
• Change in residency status (becoming an NRI)

There's a penalty of 1% lower interest for the whole period.

#After 15 years: three choices

1. Close the account and withdraw everything tax-free.
2. Extend without deposits — the balance keeps earning interest; you can withdraw any amount once a year.
3. Extend with deposits in 5-year blocks — submit Form H (Form 4) within one year of maturity. You can withdraw up to 60% of the opening balance of each block over the 5 years.

If you do nothing, the account is automatically extended without deposits.

#How to open a PPF account

• Online: in your bank's net banking or app (SBI, ICICI, HDFC, Axis and others) — needs your Aadhaar, PAN and a savings account with the bank.
• Offline: at a post office or bank branch with Form A (account opening form), KYC documents, a photo and the first deposit.
• Add a nominee when opening.

#Common mistakes

• Depositing after the 5th and losing a month's interest.
• Missing the ₹500 minimum in a year — the account becomes inactive. Revive it by paying ₹500 for each missed year plus a ₹50 penalty per year.
• Exceeding ₹1.5 lakh across your own and a minor's account — the excess earns no interest.
• Forgetting to extend with Form H if you want to keep depositing after 15 years.
• Opening two PPF accounts in your own name — the second one is irregular.

Tip: The government reviews small-savings rates every quarter; the January–March 2027 rate is usually announced around 31 December. Meanwhile, compare PPF with equity growth in the SIP calculator.

#Frequently asked questions

What is the PPF interest rate for October–December 2026?

7.1% per year, compounded annually.

Is PPF interest taxable?

No. PPF interest and maturity are fully tax-free under both tax regimes.

Can I deposit more than ₹1.5 lakh in PPF?

No. The excess won't earn interest and won't get a deduction.

Can I have a PPF account in a bank and a post office?

No. One person can have only one PPF account, though you can transfer it between bank and post office.

What happens if I miss a year's deposit?

The account becomes inactive. Pay ₹500 for each missed year plus a ₹50 penalty per year to revive it.

Can an NRI invest in PPF?

An NRI can't open a new account. If you opened it as a resident, you can continue it until maturity but can't extend it.

Is PPF better than mutual funds?

They do different jobs. PPF gives safe, tax-free fixed returns; equity funds can grow faster over long periods but go up and down. Many people use both. See SIP vs lump sum.

#Sources

• Business Today — Small savings rates unchanged for Q3 FY27
• National Savings Institute — PPF scheme rules
• ClearTax — PPF account rules and benefits