How PPF interest works
PPF interest is compounded once a year. It's calculated on the lowest balance between the 5th and the end of each month, so deposit before 5 April to earn interest for the full year. This calculator assumes you do.
Balanceyear end = (Balancestart + Deposit) × (1 + r)
Example
₹1.5 lakh a year for 15 years at 7.1%: you deposit ₹22.5 lakh and get about ₹40.68 lakh, all tax-free.
Key PPF rules
- Deposit: ₹500 to ₹1.5 lakh per financial year.
- Lock-in: 15 years. You can then extend in 5-year blocks, with or without new deposits.
- Tax: EEE. Deposits qualify for 80C (old regime), and interest and maturity are tax-free.
- Loans and withdrawals: loans are allowed from year 3 to year 6, and partial withdrawals from year 7.
- Rate: set by the government every quarter. It's 7.1% for July–September 2026.
Frequently asked questions
Can I open more than one PPF account?
No. Each person can have only one PPF account, though you can open one for a minor child.
Should I choose PPF or ELSS?
PPF gives a guaranteed, tax-free return. ELSS mutual funds can grow more over time but carry market risk. Many people use both.
Estimates only. Assumes the rate stays constant and deposits are made before 5 April each year. Actual interest follows the rate declared each quarter.