Maximum: ₹1,50,000
Current PPF rate: Check Ministry of Finance website for latest quarterly rate
Minimum: 15 years, can be extended in blocks of 5 years
Total deposits
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Total interest
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Maturity amount
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Worked Examples
See how PPF grows your savings with real calculations using the site's formula.
Example 1: Maximum Annual Investment
Scenario: Invest the maximum ₹1.5 lakh every year for 15 years at 7.1% interest
• Annual deposit = ₹1,50,000
• Interest rate = 7.1% p.a. (compounded annually)
• Tenure = 15 years
Calculation:
Total deposits = ₹1,50,000 × 15 = ₹22,50,000
Maturity = ₹1,50,000 × [(1.071^15 - 1) / 0.071] = ₹40,68,209
Interest earned = ₹40,68,209 - ₹22,50,000 = ₹18,18,209
ROI: 80.81%
(Example uses 7.1% for illustration; use current rate for actual calculation)
Example 2: Moderate Annual Investment
Scenario: Invest ₹50,000 per year for 15 years at 7.1% interest
• Annual deposit = ₹50,000
• Interest rate = 7.1% p.a.
• Tenure = 15 years
Total deposits = ₹50,000 × 15 = ₹7,50,000
Maturity = ₹50,000 × [(1.071^15 - 1) / 0.071] = ₹13,56,070
Interest earned = ₹13,56,070 - ₹7,50,000 = ₹6,06,070
ROI: 80.81%
(Example uses 7.1% for illustration)
Example 3: Extended Tenure (20 years)
Scenario: Invest ₹1 lakh/year for initial 15 years, then extend for 5 more years at 7.1%
• Annual deposit = ₹1,00,000 (for first 15 years)
• Interest rate = 7.1% p.a.
• Total tenure = 20 years (15 + 5 extension)
15-year maturity = ₹1,00,000 × [(1.071^15 - 1) / 0.071] = ₹27,12,139
After 5 more years (no new deposits): ₹27,12,139 × 1.071^5 = ₹38,33,046
Total deposits = ₹15,00,000, Interest = ₹23,33,046
ROI: 155.54%
(Example uses 7.1% for illustration)
Common Mistakes to Avoid
Depositing less than ₹500 in a year
If you deposit less than ₹500 in any financial year, your PPF account becomes inactive. Reactivating requires paying a penalty of ₹50 per year plus minimum ₹500 for each dormant year. Always deposit at least ₹500 annually to keep the account active.
Exceeding the annual limit of ₹1.5 lakh
Deposits above ₹1.5 lakh in a financial year don't earn interest and aren't eligible for Section 80C deduction. Excess amounts are returned without interest. Plan your deposits to stay within the limit across all PPF accounts (including your spouse's or child's account where you're a guardian).
Missing the 5th of the month deposit window
PPF interest is calculated monthly on the lowest balance between the 5th and last day of each month. Deposits made after the 5th don't earn interest for that month. For maximum returns, always deposit before the 5th. A ₹1.5L deposit on 6th April earns 11 months interest, but on 4th April earns 12 months.
Taking loans instead of partial withdrawals
PPF loans (available from 3rd to 6th year) charge 1% interest, while partial withdrawals (from 7th year onwards) are interest-free. Once you cross 7 years, use partial withdrawals instead of loans. You can withdraw up to 50% of the balance from 4 years ago, once per year.
Closing the account before 15 years
Premature closure (before 15 years) is allowed only in specific cases: medical emergency, higher education, or change of residency. Interest rate on premature closure may be reduced by 1%. The 15-year lock-in is a feature, not a bug – it enforces long-term discipline for wealth creation.
Not extending the account after maturity
After 15 years, you can extend your PPF in 5-year blocks with or without contributions. If you extend with contributions, you continue getting 80C benefits. If extended without contributions, the corpus still earns tax-free interest. Many people withdraw prematurely and lose years of compounding – extend and let it grow.
Opening multiple PPF accounts
An individual can have only ONE PPF account in their name. If you open a second account (even at a different bank/post office), both accounts become invalid and won't earn interest. However, you can open accounts for minors as a guardian, which count against their ₹1.5L limit, not yours.
Ignoring the nomination
Failing to add a nominee means your PPF balance will be transferred through legal succession, which can take months or years. Add or update your nominee (Form E) at the bank/post office where you hold the account. You can nominate multiple people with percentage shares.
Updated: October 2026
Source: Department of Economic Affairs (Ministry of Finance) and India Post
Current rate: PPF interest rates are notified quarterly by the Government of India. Check the latest rate on the Ministry of Finance website or India Post before investing.
Note: PPF rules and interest rates are subject to change. For account opening and compliance, refer to official notifications on egazette.gov.in or consult your bank/post office.
PPF Formula Explained
Maturity Amount = P × [(1 + r)^n - 1] / rWhere:
- P = Annual deposit amount (₹500 to ₹1,50,000)
- r = Annual interest rate (as a decimal, e.g., 7.1% = 0.071)
- n = Number of years (minimum 15 years)
For extensions without additional deposits:
Extended Maturity = 15-year Maturity × (1 + r)^extension_yearsInterest calculation: PPF interest is compounded annually but credited at the end of each financial year. Interest for each month is calculated on the lowest balance between the 5th and the last day of that month. This is why depositing before the 5th is crucial.
PPF Features & Benefits
Key Features
- Tax-free returns under Section 80C
- Minimum tenure: 15 years
- Annual deposit limit: ₹500 - ₹1,50,000
- Interest rate: 7.1% (compounded annually)
- Can be extended in blocks of 5 years
Benefits
- Tax deduction up to ₹1.5 lakh under 80C
- Tax-free maturity amount
- Loan facility available from 3rd year
- Partial withdrawal from 7th year
- Government-backed security
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Frequently Asked Questions
What is PPF?
PPF (Public Provident Fund) is a long-term savings scheme offered by the Government of India with tax benefits. It has a lock-in period of 15 years, offers tax-free returns, and provides EEE (Exempt-Exempt-Exempt) status under Section 80C.
What is the current PPF interest rate?
PPF interest rates are reviewed quarterly by the Government of India and notified through gazette notifications. Rates typically range from 7-7.5% p.a., compounded annually. Always check the current rate on the Department of Economic Affairs website or with your bank/post office before investing.
What is the minimum and maximum investment in PPF?
The minimum annual investment in PPF is ₹500, and the maximum is ₹1.5 lakhs per financial year. If you deposit less than ₹500 in any year, the account becomes inactive and attracts a reactivation penalty of ₹50 per dormant year plus arrears.
Can I withdraw from my PPF account before 15 years?
Partial withdrawal is allowed from the 7th year onwards - you can withdraw up to 50% of the balance from 4 years ago, once per financial year. Premature closure is allowed only in specific cases (medical emergency, higher education, or change of residency), and the interest rate may be reduced by 1%.
How is PPF interest calculated?
PPF interest is calculated monthly on the lowest balance between the 5th and last day of each month, then compounded annually and credited at year-end. This is why depositing before the 5th is crucial - deposits after the 5th don't earn interest for that month.
Can I extend my PPF account after 15 years?
Yes, you can extend your PPF account in blocks of 5 years, with or without making further contributions. If you extend with contributions, you continue getting Section 80C benefits. If extended without contributions, the corpus still earns tax-free interest, and you can make one partial withdrawal per year.
What are the tax benefits of PPF?
PPF offers triple tax exemption (EEE): (1) Contributions up to ₹1.5 lakh qualify for Section 80C deduction, (2) Interest earned is completely tax-free, (3) Maturity amount is tax-free. This makes PPF's effective post-tax return significantly higher than taxable fixed deposits.
Can I have multiple PPF accounts?
No, an individual can have only ONE PPF account in their name. If you open a second account (even at a different bank or post office), both accounts become invalid and won't earn interest. However, you can open separate PPF accounts for minor children as a guardian.