Your complete PPF guide for 2026: Interest rate, tax perks and withdrawal rules explained
The Public Provident Fund remains one of India’s most trusted long-term savings options. Here’s a simple guide to its interest rate, tax benefits, maturity rules and withdrawal provisions in 2026.
PPF
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The Public Provident Fund (PPF), which has been favoured by conservative investors for many years now, provides safety and good returns. The plan enjoys great popularity among those who are working on salaries and even among self-employed people, who want to ensure a comfortable life for their families or children.
Even in 2026, when there are many market-based investment products to choose from, the PPF is still very useful due to guaranteed gains and tax benefits.
If you want to start saving under this scheme or continue doing it, you should learn more about the recent guidelines of the scheme.
What is the current PPF interest rate?
As of June 2026, the government continues to offer an interest rate of 7.1 percent per annum on PPF deposits. The interest rate is reviewed every quarter by the Ministry of Finance, although it has remained unchanged for several quarters.
Interest is calculated on the lowest balance between the fifth day and the last day of each month and is credited to the account at the end of the financial year.
Because of this calculation method, investors often try to deposit money before the 5th of the month, especially in April, to maximise annual interest earnings.
Understanding the tax benefits
One of the biggest attractions of PPF is its Exempt-Exempt-Exempt (EEE) status.
The contributions paid into a PPF scheme are eligible for deduction under Section 80C of the Income Tax Act, up to a ceiling of Rs 1.5 lakh in each financial year.
All the interest income that accrues in the account is exempt from any form of taxation. Besides this, even the maturity proceeds obtained upon completion of the term are also not taxable. It is due to this reason that the PPF investment is one of the most tax-efficient investments.
How much can you invest?
A PPF account can be opened with a minimum annual contribution of Rs 500. The maximum amount that can be deposited in a financial year is Rs 1.5 lakh.
Investors can make deposits in a lump sum or through multiple instalments during the financial year, subject to the overall annual limit.
Accounts can be opened at designated banks and post offices across the country.
What are the maturity rules?
There exists a lock-in period of 15 years for the opening financial year of the PPF account.
On maturity, several choices become available to the investor. He may choose to withdraw all the money in the account and close the same. On the other hand, he may continue with the PPF account by renewing it for five-year periods, along with some more contributions.
Alternatively, the investor may decide not to make any further contributions, yet allow the account to generate interest on the existing balance.
The choice that is available to investors post-maturity makes the PPF scheme a useful tool not only for retirement but also as a long-term wealth creation tool.
When can you withdraw money?
Even though PPF is an investment plan meant for the longer term, early withdrawal of money is possible once a certain period is passed.
Partial withdrawal of money from PPF is possible for investors starting the seventh year and onward depending on fixed limits.
Loans can be taken on PPF investments. This is possible after one financial year and within five financial years of opening the PPF account.
Early closure is possible in some cases such as those of emergency and education expenses among others.
Is PPF still worth considering in 2026?
PPF will continue to be a good choice for risk-averse investors seeking safety, consistent returns, and tax benefits in 2026. Market-linked investments may yield better results, but these come with more risks.
PPF ensures security and can help in building a balanced financial portfolio. Many families will find PPF useful in creating a fund for the future without being exposed to market risk.
FAQs
Can I open more than one PPF account in my name?
No. A person is eligible to have only one PPF account under his/her name, except for some special instances where a PPF account belongs to a minor.
What happens if I do not deposit the minimum Rs 500 in a year?
The account becomes inactive. However, it can be revived by paying the prescribed penalty and the required minimum contribution.
Can I continue my PPF account after 15 years?
Yes. The account can be extended every five years, whether or not the account holder makes any further deposits into the account after its maturity.
Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.