Public Provident Fund
India's best long-term wealth builder — tax-free at every stage, government-guaranteed.
Rate effective: July–September 2026 (Q2 FY 2026-27) · Last verified: July 2026 · Source: India Post
Reviewed by Tushar Paturde, CFP® — AMFI-registered Mutual Fund Distributor (ARN-129322)
What is Public Provident Fund?
The Public Provident Fund (PPF) is the gold standard of long-term savings in India. It is the only investment that is EEE — Exempt, Exempt, Exempt — meaning your contribution saves tax (80C), the interest earned is tax-free, and the maturity amount is also fully tax-free. No other guaranteed investment offers this.
PPF has a 15-year lock-in, which sounds long but is actually its strength — it forces long-term thinking and protects your money from impulsive withdrawals. Partial withdrawal is allowed from year 7, and loans can be taken from year 3.
The government cannot attach or seize a PPF account even in case of debt recovery proceedings — making it one of the safest wealth-preservation tools available.
Who Should Invest?
- Anyone in the 20% or 30% tax bracket building long-term wealth
- Self-employed individuals who don't have access to EPF
- Parents building a corpus for a child's education or marriage (open a PPF in the child's name)
- Anyone who wants a guaranteed, completely tax-free retirement fund
Key Features
- EEE tax status — contribution, interest, and maturity all tax-free
- 15-year tenure, extendable in 5-year blocks indefinitely
- Minimum: ₹500/year. Maximum: ₹1.5 lakhs/year (per account).
- Partial withdrawal allowed from year 7
- Loan against PPF available from year 3 to year 6
- Cannot be attached by court orders or creditors
- Can be opened for a minor child (limit counts towards parent's ₹1.5L cap)
Eligibility — Who Can Open PPF?
- Any resident Indian individual can open a PPF account, in their own name or on behalf of a minor
- One individual can hold only one PPF account in their own name (excluding an account opened for a minor)
- Self-employed individuals, and those without access to EPF, are common eligible investors
- NRIs cannot open a new PPF account; an account opened while resident can be maintained (subject to RBI rules on further deposits) until maturity
How to Invest in PPF
- Visit any post office or PPF-enabled bank branch with a filled account opening form
- Submit KYC documents — PAN card and address proof
- Deposit the opening amount — minimum ₹500, in one lump sum or up to 12 instalments a year, up to ₹1.5 lakh per year
- Most banks also let you open and operate a PPF account entirely online via net banking, once your KYC is complete
- Deposit before the 5th of the month wherever possible, so that month's interest is credited on the full deposited amount
Premature Withdrawal and Loan Against PPF
PPF has a 15-year lock-in, but it isn't fully inaccessible before that. From the 3rd financial year, you can take a loan of up to 25% of the balance at the end of the 2nd preceding financial year, repayable within 36 months at 1% above the prevailing PPF rate (rising to 6% above if not repaid within that window). From the 7th financial year, you can make one partial withdrawal per year of up to 50% of the balance at the end of the 4th preceding year or the immediately preceding year, whichever is lower. Full premature closure of the account before 15 years is allowed only in specific cases — such as life-threatening illness of the account holder or higher-education expenses of the account holder or a dependent — and comes with a 1% p.a. reduction in the interest paid for the entire holding period.
PPF also cannot be attached or seized by a court or creditors even in debt-recovery proceedings, which makes it one of the safest wealth-preservation instruments available alongside its liquidity options.
Taxation and ITR Reporting
PPF is one of the very few EEE (Exempt-Exempt-Exempt) instruments in India: your contribution up to ₹1.5 lakh per year qualifies for a Section 80C deduction (old regime only), the interest credited every year is entirely tax-free, and the maturity amount — along with any partial withdrawal from year 7 or loan proceeds — is also completely tax-free. No TDS applies at any stage, and since the interest isn't taxable income at all, there's nothing to declare in your ITR.
Watch Out For
- 15-year lock-in — not suitable for funds you may need before that
- Interest rate is set by the government quarterly — not fixed for the full 15 years
- NRIs cannot open new PPF accounts (existing accounts can be maintained until maturity)
PPF Example
Investing the full ₹1.5 lakh every year in PPF at the current 7.1% p.a. compounds to roughly ₹40.7 lakhs over the 15-year tenure — and every rupee of that, principal and interest, is tax-free at withdrawal, on top of the ₹1.5 lakh annual 80C deduction you claim while contributing.
How PPF Compares
A side-by-side look at PPF against PPF, NSC, and the 5-year Post Office Time Deposit — all figures are the currently published, verified rates.
| Scheme | Rate (% p.a.) | Compounding | Tenure | Min Investment | Max Investment | 80C | TDS |
|---|---|---|---|---|---|---|---|
| PPF | 7.1% | Annual | 15 years | ₹500/year | ₹1.5 lakhs/year | ✓ | – |
| NSC | 7.7% | Annual | 5 years | ₹1,000 | No limit | ✓ | – |
| POTD 5Y | 7.5% | Quarterly | 5 years | ₹1,000 | No limit | ✓ | Yes |
Compare All NSS Schemes
See how PPF compares to all other National Savings Schemes in one table.
← View All NSS Interest RatesAll NSS Schemes
Frequently Asked Questions
What is the current PPF interest rate?
7.1% p.a., compounded annually, reviewed by the government every quarter.
Is PPF interest and maturity amount tax-free?
Yes — PPF is a fully EEE instrument. The contribution is deductible under Section 80C, the interest is tax-free, and the maturity amount is tax-free too.
When can I withdraw money from my PPF account?
Partial withdrawals of up to 50% of the eligible balance are allowed once a year from the 7th financial year onward. A loan against the balance is available from the 3rd to the 6th financial year instead, if you need funds earlier.
What happens to PPF after 15 years?
You can withdraw the full maturity amount and close the account, or extend it in blocks of 5 years — with or without making further contributions during the extension.
Can I open more than one PPF account?
No, an individual can hold only one PPF account in their own name. You can, however, open a separate account for a minor child, subject to the combined ₹1.5 lakh annual limit across both.
Can NRIs invest in PPF?
NRIs cannot open a new PPF account. An account opened while the holder was a resident can be maintained until maturity, but typically without further contributions once NRI status begins.
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