The Public Provident Fund (PPF) is one of the few investments in India that’s completely tax-free at every stage — the deposit, the interest earned, and the final maturity amount. Backed by the Government of India, it’s a core part of most conservative long-term savings plans.
[Use the PPF Calculator above ↑] — enter your yearly investment to see your exact maturity value.
The PPF interest rate for the October–December 2026 quarter is 7.1% per annum, compounded annually. The rate is revised quarterly by the Ministry of Finance, though it has remained at 7.1% for a sustained stretch of recent quarters.
PPF carries EEE (Exempt-Exempt-Exempt) status — a rare classification in Indian tax law:
Compare this to a bank FD, where interest is fully taxable at your slab rate — a PPF investment at a lower headline rate can still deliver a better after-tax return than a higher-rate FD, especially if you’re in a higher tax bracket.
This is a detail many people miss: PPF interest is calculated on the lowest balance between the 5th and the last day of each month. If you deposit your full yearly amount on April 1st (the start of the financial year) rather than waiting until March, you earn a full year’s interest on that money instead of losing months of potential interest. Depositing before the 5th of any month (rather than after) similarly ensures that month’s deposit starts earning interest immediately rather than from the following month.
| Scheme | Rate | Tenure | Tax Treatment |
|---|---|---|---|
| PPF | 7.1% | 15 years (extendable) | Fully tax-free (EEE) |
| SCSS | 8.2% | 5 years (extendable) | Fully taxable, 80C on deposit only |
| Post Office RD | 6.7% | 5 years | Fully taxable |
| NSC | 7.7% | 5 years | Taxable, but reinvested interest qualifies for 80C |
PPF’s lower headline rate compared to SCSS or NSC is offset by its complete tax exemption — for savers in higher tax brackets, the after-tax return often comes out ahead. See our SCSS calculator if you’re 60+ and comparing options.
What is the current PPF interest rate?
7.1% per annum for the October–December 2026 quarter, compounded annually, revised quarterly by the Ministry of Finance.
Can I withdraw money from PPF before 15 years?
Partial withdrawals are allowed from the 7th financial year onward, subject to specific limits. Full premature closure is allowed only in limited circumstances (like medical emergencies or higher education), with conditions.
Is PPF interest really tax-free?
Yes — PPF carries EEE status, meaning the investment, the interest earned, and the maturity amount are all completely exempt from tax.
What happens after 15 years?
You can withdraw the full maturity amount, or extend the account in blocks of 5 years indefinitely — either continuing to contribute or leaving the existing balance to keep earning interest without further deposits.
See also our FD interest rates guide and passive income ideas in India for more government-backed savings options.
