What is the PPF interest rate for FY 2025-26?

7.1% a year, compounded annually, the same rate the scheme has paid since April 2020. The Finance Ministry reviews small savings rates every quarter and the prevailing rate applies to your whole balance, so an account opened at 8% earns 7.1% today. Check the current quarter before treating any 15-year projection as fixed.

How much will ₹1.5 lakh a year in PPF give after 15 years?

₹40,68,209 at 7.1%, on ₹22,50,000 deposited, if each year's deposit goes in by 5 April. That is ₹18,18,209 of interest, all of it tax-free, plus up to ₹6,75,000 of tax saved through the 80C deduction over the 15 years for someone in the 30% slab on the old regime. Extend to 25 years and the maturity crosses ₹1 crore.

Why does the 5th of the month matter for PPF?

Interest for each month is calculated on the lowest balance between the 5th and the last day of the month, so a deposit on the 6th earns nothing until the following month. A lump sum on 5 April earns ₹10,650 in the first year at 7.1%; the same ₹1.5 lakh deposited on 28 March earns nothing that year. Set standing instructions for the 3rd.

Can I take money out of PPF before 15 years?

A loan of up to 25% of the balance is available from the third to the sixth financial year at 1% over the PPF rate. From the seventh year one partial withdrawal a year is allowed, up to 50% of the balance at the end of the fourth preceding year. Full closure after five years is allowed only for serious illness, higher education or a change of residency, at a 1% interest penalty.

Is PPF worth it under the new tax regime?

The 80C deduction goes, but the interest and the maturity amount stay fully exempt, which no FD can match. A 7.1% tax-free return is worth about 10.1% before tax for someone in the 30% slab. The case is weaker than under the old regime, not gone, and the sovereign guarantee has not changed.

What happens if I deposit more than ₹1.5 lakh in a year?

The excess earns no interest and gets no 80C deduction; it sits in the account until it is refunded. The limit is per person across all PPF accounts including one held for a minor child, so a second account is not a workaround. The minimum is ₹500 a year, and missing it makes the account discontinued until you pay arrears plus ₹50 a year.

PPF Calculator: 15-Year Maturity, Interest, Tax Saved

Annual deposit, the rate and the term

The annual deposit is what you put in per financial year, across every PPF account in your name including one you hold for a minor child. Enter more than ₹1,50,000 and the calculator keeps running but tells you the excess earns nothing, which is what the post office or bank does with it too: the extra is held without interest and without an 80C deduction and eventually returned. The minimum is ₹500 a year, and missing that is what gets an account discontinued.

The rate is 7.1% a year. It has been 7.1% since April 2020, through every quarterly review since, which is unusual; it was 8.7% in 2015, dipped to 7.6% in early 2018, went back to 8% later that year, and can move again in any quarter. The Finance Ministry notifies small savings rates for each quarter a few days before it starts. The rate applies to your whole balance for that quarter, not the rate the account was opened at, so a 15-year projection at a fixed 7.1% is a projection, not a promise.

The term is 15 years or 15 plus five-year extensions. One detail catches people: the 15 years run from the end of the financial year the account was opened in. Open it in January 2026 and the first full year is FY 2026-27; the account matures on 1 April 2041, not in January 2041.

How the ₹1.5 lakh a year becomes ₹40.7 lakh

PPF compounds annually. Interest is worked out monthly on the lowest balance between the 5th and the last day of the month, added up over the year, and credited once, on 31 March. Each year’s deposit then earns for every year that remains:

M = sum over years of P × (1 + r)^(N - y + 1)

P is the annual deposit (capped at ₹1,50,000)
r is the rate as a decimal
N is the term, y is the year the deposit was made

The calculator assumes each deposit lands at the start of the financial year, in April. That is the optimal case and the one every official calculator assumes; the next section is about what happens when you do not.

₹1,50,000 a year at 7.1% for 15 years


Total deposited	₹22,50,000
Maturity value	₹40,68,209
Interest earned	₹18,18,209
Tax saved at 30% slab	₹6,75,000

The tax saved line is the 80C deduction valued at the 30% slab: ₹45,000 a year for 15 years, and only under the old regime. If you file under the new regime it is zero, and the rest of the table still stands. Nothing here is taxed on the way out. PPF is exempt on deposit, exempt on interest and exempt at maturity, which for someone in the 30% slab makes 7.1% worth about 10.1% before tax against an FD. That is why ₹1.5 lakh a year into PPF is the first thing most CAs suggest to a salaried client on the old regime, and why it still gets suggested on the new one.

A smaller deposit scales in proportion: ₹50,000 a year for 15 years matures at ₹13,56,070.

The extension blocks

Term	Deposited	Maturity
15 years	₹22,50,000	₹40,68,209
20 years	₹30,00,000	₹66,58,288
25 years	₹37,50,000	₹1,03,08,015
30 years	₹45,00,000	₹1,54,50,911

Ten more years of the same ₹1.5 lakh takes ₹40.7 lakh to over ₹1 crore, and ₹65.6 lakh of that is interest. Someone who opens a PPF at 25 and keeps it going to 55 has a tax-free ₹1.5 crore next to their EPF, which is the retirement plan a lot of people think they need a fund manager for.

The 5th of the month, and the year-end rush that costs you

Interest for a month is calculated on the lowest balance between the 5th and the end of the month. A deposit on the 6th earns nothing until next month. A deposit on the 5th earns for the whole month.

Stretched over a year, this is the most expensive habit in PPF. The March-end tax rush, where ₹1.5 lakh goes in on 28 March to make the 80C cut-off, gets the deduction but earns nothing for FY 2025-26: the same deposit on 5 April 2025 would have earned ₹10,650 that year, and that ₹10,650 then compounds for the rest of the term. Across a 15-year account the March habit costs roughly a year of returns.

If you cannot manage a lump sum in April, ₹12,500 a month works, paid on or before the 5th. In the first year that earns about ₹5,769 against ₹10,650 for the April lump sum, so monthly is worth about half in year one, and the gap narrows as the balance grows. The one thing not to do is ₹12,500 on the 7th every month, which loses a month of interest on every instalment for no reason. Set the standing instruction for the 3rd.

Loans, partial withdrawals and closing early

Locked for 15 years is the headline, and the rules are looser than that in practice.

A loan is available from the third financial year to the sixth, up to 25% of the balance at the end of the second year before the year you apply. The interest is 1% a year above the PPF rate, repayable within 36 months, and it is one of the cheapest loans available anywhere; it is just small.

A partial withdrawal is allowed from the seventh financial year, once a year, up to 50% of the balance at the end of the fourth year before the withdrawal or the end of the previous year, whichever is lower. There is no tax on it and no reason needs to be given.

Premature closure is allowed after five financial years for a life-threatening illness of the holder, spouse, dependent children or parents, for higher education of the holder or a dependent child, or if the holder’s residency status changes. The cost is 1 percentage point of interest, recalculated across the whole life of the account, so a closure in year eight is priced at 6.1% from day one.

Discontinued accounts (a year with less than ₹500 deposited) can be revived at the bank or post office by paying ₹500 for each missed year plus a ₹50 penalty per year. Until revived, no loan and no withdrawal; the balance still earns interest.

NRIs cannot open a PPF account, and an account holder who becomes an NRI can run the existing one to maturity but not extend it.

After 15 years: extend, or move to an FD or SIP

On maturity there are three options. Withdraw everything, tax-free. Extend for five years without further deposits, which is what happens by default if you do nothing, and which lets you withdraw any amount once a year while the balance keeps earning 7.1% tax-free. Or extend with deposits, which needs Form 4 submitted within a year of maturity, and allows withdrawals of up to 60% of the balance at the start of the block over its five years.

The extend-without-deposits option is underrated. A ₹40 lakh balance earning 7.1% tax-free with one withdrawal a year is better than any FD a bank will offer a 45-year-old, and the FD interest would be taxed. If you are choosing between the two after maturity, the FD wins only if you need more than one withdrawal a year.

For the same annual discipline with a market-linked return and no lock-in, the SIP calculator shows what ₹12,500 a month does at an assumed 12%: a bigger number, no guarantee, and tax on the way out. For a monthly commitment with a shorter horizon, the RD calculator is the honest comparison. And to see what the 80C deduction is worth in your own case, or whether it is worth anything, run both regimes through the income tax calculator.

PPF Calculator