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PPF Rate 7.1% · Tax Free · Govt Backed
PPF Calculator — Estimate Your Tax-Free Returns
Calculate your Public Provident Fund maturity amount instantly. See year-by-year growth, interest earned, and plan your long-term tax-free wealth with the current 7.1% PPF interest rate on sipcalculators.net.
PPF Growth Timeline
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Year-by-Year PPF Breakdown
Detailed growth per year| Year | Opening Balance | Deposit | Interest | Closing Balance |
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What is PPF (Public Provident Fund)?
The Public Provident Fund (PPF) is a long-term savings scheme backed by the Government of India, introduced in 1968. It offers guaranteed, risk-free returns with complete tax exemption under the EEE (Exempt-Exempt-Exempt) framework. PPF is one of the most popular investment options for conservative investors looking to build a tax-free retirement corpus over 15+ years.
Current PPF Interest Rate (2026)
The PPF interest rate for the current quarter of 2026 is 7.1% per annum, compounded annually. The rate is set by the Ministry of Finance and reviewed every quarter. Historically, PPF rates have ranged from 7.1% to 12% over the past three decades. Even at the current rate, PPF remains attractive due to its complete tax-free nature and government guarantee.
PPF Rules & Key Features
- Lock-in Period: 15 years minimum tenure, extendable in 5-year blocks indefinitely
- Investment Limit: Minimum Rs 500 per year, maximum Rs 1,50,000 per year
- Tax Benefits (Section 80C): Deposits up to Rs 1.5 lakh qualify for deduction under Section 80C of Income Tax Act
- EEE Status: Investment, interest, and maturity are all completely tax-free
- Loan Facility: Available from 3rd to 6th financial year, up to 25% of balance at end of 2nd preceding year
- Partial Withdrawal: Allowed from 7th financial year onwards, up to 50% of balance
- Nomination: One or more nominees can be designated for the PPF account
PPF Calculation Formula
A = P × [((1 + r)^n - 1) / r] × (1 + r)
Where A = Maturity amount, P = Yearly deposit, r = Annual interest rate (as decimal), n = Number of years. This formula assumes a fixed annual deposit at the beginning of each year with annual compounding.
For a more accurate calculation (used by this calculator), interest is computed year-by-year: Interest = (Opening Balance + Deposit) x Rate, and the closing balance becomes the next year's opening balance.
PPF vs FD — Which Is Better?
Both PPF and Fixed Deposits are safe, guaranteed-return instruments, but they differ significantly in tax treatment, tenure, and flexibility.
| Feature | PPF | Fixed Deposit |
|---|---|---|
| Interest Rate | 7.1% (govt. set) | 6-8% (bank set) |
| Tax on Interest | Fully exempt | Taxable as per slab |
| Tax Deduction (80C) | Up to Rs 1.5L | Only 5-yr tax-saver FD |
| Lock-in | 15 years | Flexible (7 days to 10 years) |
| Risk | Zero (Govt. backed) | Very low (DICGC insured up to Rs 5L) |
| Maturity Tax | Exempt | Taxable |
| Best For | Long-term, tax-free growth | Short-to-medium term parking |
For long-term wealth building with maximum tax efficiency, PPF is the clear winner. For shorter durations or higher liquidity needs, FDs are more suitable. You can use our FD Calculator to compare returns.
Frequently Asked Questions
What is the current PPF interest rate in 2026?
The current PPF interest rate for 2026 is 7.1% per annum, compounded annually. This rate is set by the Government of India and reviewed every quarter by the Ministry of Finance. The rate has remained stable at 7.1% since April 2020. PPF interest is calculated monthly on the minimum balance between the 5th and the last day of each month, though it is credited annually.
How is PPF maturity amount calculated?
PPF maturity is calculated using compound interest on yearly balances. Each year: Interest = (Opening Balance + Year's Deposit) x Rate. The closing balance (Opening + Deposit + Interest) becomes the next year's opening balance. This compounds annually over 15 years (or longer if extended). For a yearly deposit of Rs 1,50,000 at 7.1%, the 15-year maturity is approximately Rs 40.68 lakh.
What are the tax benefits of investing in PPF?
PPF enjoys EEE (Exempt-Exempt-Exempt) tax status, the best available in India. Your deposits up to Rs 1,50,000 per year qualify for Section 80C deduction, reducing taxable income. The interest earned is completely tax-free under Section 10. And the maturity amount is also fully exempt from income tax. No other investment offers this triple tax benefit with government guarantee.
What are the PPF withdrawal and premature closure rules?
Partial withdrawals are allowed from the 7th financial year onwards. You can withdraw up to 50% of the balance at the end of the 4th preceding year or the immediately preceding year, whichever is lower. Premature closure is allowed only in special cases like serious illness, higher education, or change of residency status (NRI), after 5 years with a 1% interest rate penalty.
Can I extend my PPF account after 15 years?
Yes, PPF accounts can be extended in blocks of 5 years after the initial 15-year maturity period. You have two options: extend with contributions (continue depositing) or extend without contributions (let the existing balance earn interest). The extension request must be submitted within 1 year of maturity. There is no limit on the number of 5-year extensions.
PPF vs NPS — which is better for retirement planning?
PPF offers guaranteed 7.1% returns with full tax exemption (EEE status) and zero market risk. NPS invests in equity and debt markets, potentially delivering 9-12% returns but with market volatility. On withdrawal, 60% of NPS corpus is tax-free while 40% must be used for annuity (partially taxable). PPF suits risk-averse investors wanting guaranteed returns; NPS is for those comfortable with market exposure for potentially higher long-term growth.