The Public Provident Fund (PPF) is arguably India's favorite tax-saving investment. Safe, secure, and tax-efficient, it fits into almost every financial portfolio. In 2026, despite fluctuating market rates, PPF continues to offer stable returns with the unique "Exempt-Exempt-Exempt" (EEE) tax status.

Current PPF Interest Rate (2026)

📉 Interest Rate: 7.1% p.a.

For the current quarter (Jan-Mar 2026), the government has maintained the PPF interest rate at 7.1%. Interest is compounded annually.

Why Choose PPF? (The EEE Advantage)

PPF is one of the few instruments that enjoy EEE Tax Status:

  • Exempt 1: Investment up to ₹1.5 Lakh is tax-deductible u/s 80C.
  • Exempt 2: The interest earned every year is 100% Tax-Free.
  • Exempt 3: The final maturity amount is 100% Tax-Free.

Compare this to Fixed Deposits (FDs), where the interest is fully taxable as per your slab!

Key Rules (2026)

Rule Detail
Min/Max Deposit ₹500 min / ₹1.5 Lakh max per year.
Tenure 15 Years (Can be extended in blocks of 5 years).
Eligibility Any Indian Resident (Minors can open with Guardian). NRIs cannot open new accounts.

PPF Calculator (15 Years Projection)

If you invest ₹1.5 Lakh every year (by April 5th to maximize interest) at 7.1%:

Year Annual Investment Total Invested Interest Earned Account Balance
Year 1 ₹1,50,000 ₹1.50 Lakh ₹10,650 ₹1,60,650
Year 5 ₹1,50,000 ₹7.50 Lakh Wait for it... ₹9.0 Lakhs+
Year 10 ₹1,50,000 ₹15.0 Lakh Compounding Power ₹21.7 Lakhs
Year 15 (Maturity) ₹1,50,000 ₹22.50 Lakh ₹18.18 Lakh ₹40.68 Lakhs*

*Approximate value assuming rate stays constant at 7.1%.

Withdrawal Options

  • Partial Withdrawal: Allowed from the 7th financial year (up to 50% of the balance).
  • Loan against PPF: Available between 3rd and 6th year at 1% interest rate.
  • Premature Closure: Allowed only after 5 years for medical emergencies or higher education.

💡 Expert Verdict: The "Millionaire" Maker

PPF is not just for tax saving; it's a wealth machine. By investing ₹1.5 Lakh/year for 15 years, you create a corpus of ~₹40 Lakhs entirely Tax-Free. No other fixed-income debt instrument in India offers this EEE benefit.

🔄 Maturity Strategy

After 15 years, don't close the account! Extend it in blocks of 5 years with deposits to continue earning tax-free interest, or without deposits to just let the corpus grow.

Conclusion

While 7.1% may seem modest compared to aggressive mutual funds, the risk-free and tax-free nature of PPF makes it an essential debt component for your retirement planning. Best strategy: Open one today and deposit minimum ₹500 to start the 15-year clock!