Public Provident Fund (PPF)
The PPF is a long-term, government-backed savings instrument introduced in 1968, administered by the Ministry of Finance. It falls under the Exempt-Exempt-Exempt (EEE) tax category.
Key Characteristics
Tenure and Lock-in: The PPF carries a mandatory 15-year lock-in from the date of account opening. After maturity, the account can be extended in blocks of 5 years.
Interest Rate: Set by the government quarterly. As of early 2026, the prevailing rate is approximately 7.1% per annum, compounded annually. Historically, this rate has ranged between 7% and 12%.
Contribution Limits: Minimum ₹500 and maximum ₹1,50,000 per financial year, in a lump sum or up to 12 instalments.
Tax Treatment (EEE):
- •Contributions deductible under Section 80C up to ₹1,50,000/year
- •Interest earned fully exempt from income tax
- •Maturity proceeds exempt from tax
Partial Withdrawal and Loan
Partial withdrawals are permitted from the 7th financial year onwards, subject to limits. Loans against the PPF balance are available between the 3rd and 6th year.
Who Can Open a PPF Account
Indian residents can open an account at designated post offices and authorised bank branches. NRIs are not permitted to open new PPF accounts, though existing accounts may be maintained until maturity.
Risk Profile
The PPF carries sovereign guarantee — backed by the Government of India. The interest rate is subject to periodic revision and is not fixed for the entire tenure.