The Public Provident Fund (PPF) is one of India's most loved savings schemes — and for good reason. It gives 7.1% completely tax-free returns, is fully government-backed, and qualifies for the Section 80C deduction. Here's everything you need to know for 2026.
What Is PPF?
PPF is a long-term, government-backed savings scheme with a 15-year tenure. It's designed for risk-free wealth building and retirement savings. Because it's backed by the Government of India, your money carries virtually zero risk.
PPF Key Features at a Glance
| Feature | Details |
|---|---|
| Interest rate (2026) | 7.1% p.a., compounded yearly |
| Tenure | 15 years (extendable in 5-year blocks) |
| Min / Max per year | ₹500 / ₹1.5 lakh |
| Tax status | EEE — fully tax-free |
| Risk | Zero (government-backed) |
| Partial withdrawal | From 7th year |
The Big Advantage: EEE Tax Status
PPF is one of the very few investments with EEE (Exempt-Exempt-Exempt) status:
- Exempt 1: Your deposit (up to ₹1.5 lakh) is deductible under Section 80C.
- Exempt 2: The 7.1% interest you earn each year is tax-free.
- Exempt 3: The entire maturity amount is tax-free.
Note: the Section 80C benefit applies under the old tax regime only. Even so, the tax-free interest and maturity make PPF attractive regardless of regime.
How Much Can PPF Grow?
If you invest the full ₹1.5 lakh every year for 15 years at 7.1%, your corpus grows to roughly ₹40.7 lakh — of which about ₹18.2 lakh is tax-free interest. That's the power of long-term, tax-free compounding.
Withdrawal & Loan Rules
- Loan: Available between the 3rd and 6th year, against your balance.
- Partial withdrawal: From the 7th year, up to 50% of the balance at the end of the 4th preceding year.
- Full withdrawal: After 15 years. You can then extend in 5-year blocks, with or without fresh contributions.
- Premature closure: Allowed after 5 years only for serious illness or higher education.
PPF vs Other Options
PPF is ideal for the safe, long-term portion of your portfolio. For comparison with fixed deposits and the market-linked NPS, read our detailed FD vs PPF vs NPS guide. If you want guaranteed shorter-term returns, a fixed deposit may suit you — estimate maturity with our FD Calculator. And to see how PPF fits your overall tax planning, use the Income Tax Calculator.