Public Provident Fund (PPF): Interest Rate, Tax Benefits, Loan, Withdrawal & Maturity Rules

PPF Features

• Government-backed long-term savings scheme.
• Interest is credited annually at the rate notified by the Government for the relevant period.
• Minimum annual deposit is ₹500 and the maximum is ₹1,50,000, in multiples of ₹50.
• The ₹1.5 lakh annual ceiling includes deposits made in the subscriber's own account and in a minor's PPF account opened by that subscriber as guardian.
• Deposits can be made in one lump sum or in instalments.
• Only one PPF account can ordinarily be held by an individual in his or her own name; joint PPF accounts are not permitted.
• Loan and partial-withdrawal facilities are available subject to statutory conditions.
• After maturity, the account may be closed, continued without deposits, or extended with deposits in five-year blocks.

PPF Interest Rate for July-September 2026

The PPF rate for the quarter from 1 July 2026 to 30 September 2026 is 7.1% per annum. Interest is calculated on the lowest balance in the account between the close of the fifth day and the end of each month, and is credited at the end of the financial year.

Who Can Open a PPF Account?

An individual may subscribe to PPF on his or her own behalf. A guardian may also open and operate a PPF account on behalf of a minor as permitted by the Scheme. Joint PPF accounts are not permitted.

PPF account for a minor

A parent or lawful guardian may open an account for a minor. The annual maximum of ₹1,50,000 is applied in accordance with the Scheme to the aggregate deposits made by an individual in his or her own account and the minor account opened by that individual as guardian.

NRI / change in residential status

A non-resident should not assume eligibility to open a fresh PPF account. The current Scheme expressly recognises change in residency status as one of the specified grounds on which premature closure may be sought after the minimum qualifying period, on production of prescribed proof. Investors whose residential status changes should obtain current operational guidance from the account office before making further deposits or seeking closure.

PPF Tax Benefits

Qualifying PPF contributions are eligible for deduction under Section 80C of the Income-tax Act, 1961 within the combined statutory limit of ₹1,50,000, subject to the taxpayer satisfying the applicable conditions.

Interest credited to PPF and the amount received on eligible closure or maturity continue to enjoy favourable tax treatment under the applicable income-tax law, subject to the law in force for the relevant year.

Loan from PPF Account

A loan may be taken after expiry of one year from the end of the year in which the initial subscription was made, but before expiry of five years from the end of that year. The permitted loan cannot exceed 25% of the balance standing to the account holder's credit at the end of the second year immediately preceding the year of the loan application.

• Only one PPF loan is permitted in a year.
• A fresh loan is not available until the earlier loan and interest are fully repaid.
• The principal is to be repaid within 36 months from the first day of the month following the month of sanction.
• Where repaid within the prescribed period, interest is charged at 1% per annum over the applicable PPF loan period as provided in the Scheme; delayed or incomplete repayment attracts the higher statutory rate prescribed by the Scheme.

Partial Withdrawal from PPF

Partial withdrawal becomes available after expiry of five years from the end of the year in which the account was opened. The amount cannot exceed 50% of the balance at the end of the fourth year immediately preceding the year of withdrawal or at the end of the preceding year, whichever is lower.

Any outstanding PPF loan and interest must first be cleared before availing the withdrawal facility. The facility is available only once in a year and only from an account that has not become discontinued.

PPF Maturity and Extension

A PPF account becomes eligible for closure after expiry of 15 years from the end of the year in which it was opened. On maturity, the subscriber has three broad options:

• Close the account and withdraw the eligible balance with due interest.
• Continue without further deposits; the balance continues to earn the applicable PPF rate and one withdrawal may be made in each year within the available balance.
• Extend with deposits for a further block of five years by exercising the prescribed option within one year from maturity.

During an extended five-year block with deposits, withdrawals are subject to the limit prescribed by the Scheme, including the aggregate ceiling linked to the balance at the commencement of the block.

Premature Closure of PPF

Premature closure is not a general withdrawal option. Under the Scheme, it may be sought only after the prescribed minimum period and on specified grounds, including:

• treatment of a life-threatening disease of the account holder, spouse, dependent children or parents;
• higher education of the account holder or dependent children in a recognised institution in India or abroad; or
• change in residency status of the account holder, supported by the prescribed documents.

The Scheme provides that premature closure is not allowed before expiry of five years from the end of the year in which the account was opened. On such closure, interest is recalculated at a rate 1 percentage point lower than the rates at which interest had been credited from time to time since opening or the relevant extension.

How to Open a PPF Account

A PPF account may be opened at a Post Office or an authorised bank that offers the scheme. The account-opening process is subject to current KYC and account-office requirements.

Documents generally required

• Prescribed account-opening application.
• PAN and Aadhaar or other KYC documents accepted under current rules.
• Proof of address, where required.
• Recent photograph, where required.
• Nomination details.
• For a minor account, proof of age and guardian details as required by the account office.

Official PPF Forms, Scheme and Government Links

Use current official forms and Government sources instead of archived local copies.