Short answer: PPF pays 7.1% a year, entirely tax-free, with a 15-year lock-in and a ₹1.5 lakh annual limit. It is one of the few EEE instruments left in India — the deposit, the interest and the maturity are all exempt.
Rates and slabs are indicative, as of August 2026
PPF has been running since 1968 — over 55 years. Your parents probably had one. The reason it has survived is simple: you put money in, it grows at a guaranteed rate, and when it matures, you get everything without paying a single rupee in tax.
PPF is a 15-year savings account run by the Government of India. You invest between ₹500 and ₹1,50,000 every year. Interest rate is 7.1% per annum, compounded yearly. Investment qualifies for 80C deduction, interest is tax-free, and maturity is fully exempt. This EEE status is incredibly rare and valuable.
Almost everyone. Salaried employees should use PPF as the foundation of their 80C portfolio. Freelancers without EPF need it even more — it is their only government-backed retirement tool. Homemakers can open PPF accounts too — families often use this to build savings in the wife's name.
The only exception: if you need money back within 7 years, PPF is not right. Partial withdrawals start only from year 7. For shorter needs, consider FDs or liquid funds.
Available at any post office or major bank — SBI, ICICI, HDFC, Axis. Online opening is available if you have internet banking. You need Aadhaar, PAN, and a passport photo. One person can have only one PPF account — a second one will be closed with only principal returned.
Years 3-6: You can take a loan against your PPF balance (25% of balance at end of 2nd preceding year) at PPF rate + 1%. From year 7: One withdrawal per year, up to 50% of balance at end of 4th preceding year.
Three options: withdraw everything, extend without deposits (existing balance keeps earning), or extend with deposits for 5-year blocks. Most people extend because tax benefits continue.
Open PPF Calculator → ← All Schemes
Opening PPF for your child? The ₹1.5 lakh annual cap applies to your account and the minor’s combined — the minor-PPF rules explain the trap and the clean structure.
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Written and checked by the PaisaSamajh editorial desk · Last reviewed: 24 August 2026 · How we check this →