What is PPF and why do people love it?
The Public Provident Fund (PPF) is a government-backed savings scheme with a 15-year lock-in. Its interest rate is set by the Finance Ministry every quarter — currently 7.1% a year (July–September 2026 quarter). Deposits, interest and maturity are all tax-free, which makes PPF one of the safest long-term options for retirement or children's goals.
How PPF interest is calculated
Interest is calculated monthly on the lowest balance between the 5th and the end of each month, but credited only at the end of the financial year and then compounds. If you deposit the full year's amount by 5 April, the balance earns interest for all 12 months:
Worked example
₹1,50,000 a year for 15 years at 7.1%
- Total invested
- ₹22,50,000
- Total interest
- ₹18,18,209
- Maturity value
- ₹40,68,209
Depositing monthly instead of by 5 April lowers the maturity value slightly because each rupee earns interest for fewer months.
Key PPF rules
- Deposit between ₹500 and ₹1,50,000 in a financial year (₹1.5 Lakh is the cap).
- The account matures after 15 years and can be extended in blocks of 5 years, with or without fresh deposits.
- Partial withdrawals are allowed from the 7th financial year, and loans against the balance from the 3rd to the 6th year.
- Interest is tax-free. Under the Old regime the yearly deposit also qualifies for the 80C deduction.
The PPF rate is revised every quarter. This calculator uses one rate for the whole period, so treat long-term results as estimates.
Who should invest in PPF?
PPF suits conservative investors who want guaranteed, tax-free growth and can lock money away for 15 years — for retirement, a child's education or a long-term goal. Because equity has historically beaten PPF over long periods, many people combine PPF with market-linked investments such as a SIP.

