CalculatrPPF Account Rules — Summary of the PPF Scheme, 2019
📋 Table of Contents
The Public Provident Fund (PPF) remains one of India's most trusted long-term savings instruments in 2026 — with a government-set interest rate (press-reported at 7.1% for October to December 2026, reviewed quarterly) and a 15-year account term.
This guide summarises the Public Provident Fund Scheme, 2019 (official notification text): deposit limits, interest calculation, withdrawal, loan and extension. The rules below are as notified in December 2019. We have not checked for later amendments, so confirm current conditions with your bank or post office before acting. Tax treatment is not covered.
1. What is PPF (Public Provident Fund)?
PPF is a government long-term savings scheme run under the Public Provident Fund Scheme, 2019, made under the Government Savings Promotion Act, 1873.
Key features at a glance:
| Feature | Details |
|---|---|
| Interest Rate | Set by the government each quarter; 7.1% p.a. for Oct to Dec 2026 per press reports. Interest is calculated monthly and credited at the end of each year |
| Lock-in Period | 15 years (extendable in 5-year blocks) |
| Minimum Deposit | ₹500 per financial year |
| Maximum Deposit | ₹1,50,000 per financial year |
| Who Can Open | An individual (joint accounts are not allowed) |
| Number of Accounts | One per individual, plus one for each minor or person of unsound mind the individual is guardian of |
| Loan Facility | After one year and before five years from the end of the opening year (about the 3rd to 6th financial year) |
| Partial Withdrawal | From 7th year onwards |
2. PPF Interest Rate 2026
The government notifies the PPF rate every quarter (for April, July, October and January). Press reports put the October–December 2026 (Q3 of FY 2026-27) rate at 7.1% per annum, unchanged since April 2020. Official notices are published on the Department of Economic Affairs small savings page, so confirm the figure for the current quarter there before you invest.
How PPF Interest is Calculated
PPF interest for a month is calculated on the lowest balance between the close of the 5th day and the last day of that month, and is credited at the end of the financial year (31st March). So a fresh deposit made after the 5th starts earning interest only from the next month — your existing balance keeps earning as usual.
The Scheme as notified on 12 December 2019 stated 7.9% a year. The rate has been revised since, so rely on the latest Department of Economic Affairs notice rather than this page.
3. PPF Deposit Rules & Limits 2026
Annual Deposit Limits
- Minimum: ₹500 per financial year — if the minimum is not deposited in a year the account is treated as discontinued under the Scheme
- Maximum: ₹1,50,000 per financial year covering your own account together with any account you open for a minor
Manner of Deposit
The Scheme allows deposits in multiples of ₹50, in one lump sum or in instalments, within the yearly limit.
4. Tax Treatment
This page does not state the income-tax treatment of PPF deposits, interest or maturity for FY 2026-27, because we could not confirm it under the Income-tax Act, 2025. Check incometaxindia.gov.in or ask a tax professional.
5. PPF Withdrawal & Premature Closure Rules
Partial Withdrawal Rules
Partial withdrawal is permitted from the 7th financial year onwards (i.e., after completing 6 full years). You can withdraw the lower of:
- 50% of the balance at the end of the 4th year before the year of withdrawal, OR
- 50% of the balance at the end of the preceding year
Only one partial withdrawal is allowed per financial year, and any loan outstanding must be repaid first.
Premature Closure (Before 15 Years)
Premature full closure is allowed only after completing 5 financial years and only for these specific reasons:
- Life-threatening disease or serious illness of self, spouse, children, or parents
- Higher education expenses of the account holder or dependent children
- Change of residency status
On premature closure, the interest rate is reduced by 1% from the rate applicable for each year — for example 6.1% for years that were credited at 7.1%.
6. Loan Against PPF Account
PPF offers a convenient loan facility — an often-overlooked benefit that helps you access funds without breaking the investment:
| Feature | Details |
|---|---|
| Eligible period | From the 3rd to 6th financial year only |
| Maximum loan amount | 25% of the balance at the end of the 2nd preceding year |
| Interest on the loan | 1% a year on the loan principal if repaid within 36 months (paragraph 9 of the Scheme) |
| Repayment period | 36 months (3 years) |
| Number of loans | Only one loan in a year, and no fresh loan until the earlier one is repaid in full with interest |
If the loan is not repaid within 36 months, interest on the outstanding amount is charged at 6% a year in total, instead of 1% a year (not 6% on top of 1%), from the first day of the month after the loan was drawn until it is repaid (paragraph 9 of the Scheme as notified).
7. What Happens After 15 Years? Extension Options
When your PPF account matures after 15 years, you have three choices:
Option 1 — Full Withdrawal
Apply in Form 3 to close the account and withdraw the whole balance with interest up to the month before closure.
Option 2 — Extend Without Deposits
Do not make any further deposits. The existing balance continues to earn interest at the rate applicable to the Scheme. You can make one withdrawal of any amount within the balance in each year. Once the account has continued without deposits for more than a year, you cannot go back to continuing it with deposits.
Option 3 — Extend With Continued Deposits
Apply in Form 4 to the accounts office within one year of maturity to extend for a block of 5 years and keep depositing up to ₹1,50,000 a year. If you do not give the option within one year, later deposits are treated as irregular and refunded without interest. During such a block, total withdrawals cannot exceed 60% of the balance at the start of the block.
8. Opening a PPF Account
An individual opens an account by applying in Form 1 to an accounts office (post offices and authorised banks), with a minimum first deposit of ₹500 (paragraph 5 of the Scheme). Which banks offer it, whether you can open it online, and which KYC documents are needed depend on the bank or post office, so ask them directly.
10. Expert Tips to Maximise Your PPF Returns in 2026
- Deposit before 5th April every year. PPF interest is calculated on the balance between the 5th and last day of the month. Interest for a month is on the lowest balance between the 5th and month-end, so a deposit after the 5th earns nothing for that month. One month of interest on ₹1,50,000 at 7.1% is about ₹887.
- Deposit the full ₹1,50,000 annually. Even if you cannot invest ₹1.5 lakhs in one shot, set up monthly SIs of ₹12,500 each. Maximising the annual limit earns the most interest.
- Open a PPF account for your minor child. Though the combined deposit across your account + child's account cannot exceed ₹1,50,000 per year, opening a separate account for your child starts the 15-year clock early — potentially creating a sizeable corpus by the time they are 18.
- Never withdraw unless absolutely necessary. Every rupee withdrawn loses its compounding benefit. Use the loan facility (year 3–6) or partial withdrawal (from year 7) only as a last resort — and only for genuinely urgent needs.
- Think about extending after 15 years. The power of compound interest is strongest in the final years. At a constant 7.1%, ₹40 lakhs left for 5 more years grows by roughly ₹16 lakhs. The rate can change.
- Link PPF to your salary account. Set up a standing instruction to auto-transfer on 1st of every month. This removes the discipline problem and ensures you never miss a year.