For a large number of Indians, the Public Provident Fund (PPF) is the first place they put their savings. It is one of the best government tax-saving schemes. For the October to December 2026 quarter it pays 7.1% interest, compounded annually, with a lock-in of 15 years, though you can make partial withdrawals from the 7th financial year onwards.
Before you invest in PPF, you should know how the account works. Here are the main features of a PPF account, as per the Public Provident Fund Scheme, 2019 and its later amendments.
- The Public Provident Fund Scheme is a statutory scheme of the Central Government of India.
- The scheme runs for 15 years.
- The Ministry of Finance, Government of India, reviews the Public Provident Fund interest rate every quarter. For October to December 2026 it is 7.1%, compounded annually, the same rate as since April 2020.
- The minimum deposit is Rs. 500/- and the maximum is Rs. 1,50,000/- in a financial year.
- You must make at least one deposit of Rs.500/- or more in each financial year.
- You can deposit in a lump sum or in as many instalments as you like, as long as the total stays within Rs.1,50,000/- per FY. The old limit of 12 deposits a year was dropped in 2019.
- You don't have to deposit every month. You can vary the amount to suit yourself.
- If the minimum isn't deposited in a year, for whatever reason, the account is treated as discontinued. You can't take a loan or make a partial withdrawal from it until it is revived.
- You can revive a discontinued account by paying the minimum deposit of Rs.500/- plus a default fee of Rs.50/- for each year missed.
- An individual can open an account, and so can a minor through a guardian.
- Joint accounts aren't allowed.
- People who contribute to GPF, CPF or a PF account can also open a PPF account.
- A power of attorney holder can't open or operate a PPF account.
- Grandparents can't open a PPF account on behalf of a minor grandchild.
- Deposits must be in multiples of Rs.50/-, with a minimum of Rs.500/-.
- Deposits in a minor's account are added to the guardian's own deposits for the Rs.1,50,000/- limit.
- There is no age limit for opening a PPF account.
- Under the Public Provident Fund Scheme 2019, you can take a loan against your PPF deposits from the 3rd to the 6th financial year, up to 25% of the balance at the end of the second year before the year you apply. The loan must be repaid in 36 months, with interest at 1% a year (6% a year if it isn't repaid in time). The lock-in is 15 years, and you can withdraw the full amount after maturity. Partial withdrawals are allowed once five years have passed from the end of the financial year in which the account was opened, so from the 7th financial year. The most you can withdraw early is 50% of the balance at the end of the 4th year before the year of withdrawal, or at the end of the previous year, whichever is lower. Only one withdrawal is allowed each year.
- You can close a PPF account early, after five years from the end of the year it was opened, only for treatment of a life-threatening illness (yours, your spouse's, your dependent children's or your parents'), for your own or your dependent children's higher education, or if you become a non-resident. You then get 1% less interest than was credited for each year since the account was opened (or since the start of the current 5-year block, if it was extended).
- When the account holder dies, the nominee or legal heir can't continue the account. It has to be closed.
- You can extend the PPF account after maturity in blocks of 5 years, as many times as you like.
- You can also keep the account open after maturity for any length of time without depositing anything more. The balance keeps earning the normal PPF interest rate until you close the account, and you can withdraw any amount once a year.
- In an account extended with deposits, you can make one withdrawal each financial year, up to a total of 60% of the balance at the start of each 5-year block.
- The PPF scheme is run through post offices and the authorised branches of banks, including the public sector banks and some private banks, as per the GOI notification.
- You can move the account from one post office to another, from a post office to a bank, and from a bank to a post office.
- You can also move it from one bank to another, or between branches of the same bank.
- Deposits in PPF qualify for a deduction under Section 80C (section 123 of the Income-tax Act, 2025, from April 2026), but only if you use the old tax regime.
- The interest is completely tax-free.
- The maturity amount is tax-free too.
- No court order or decree can attach the balance in a PPF account to recover a debt or liability.
- You can nominate more than one person.
- It suits long-term savings best.