What Is PPF (Public Provident Fund)? A Simple Guide

Updated Oct 26, 2026 Saral Jankari Team

A plain-language guide to the Public Provident Fund: how it works, the yearly limit, the 15-year lock-in and the current interest rate.

The Public Provident Fund (PPF) is a government savings scheme. You put money away for 15 years and earn interest at a rate the government sets. It is popular because it is backed by the Government of India and the interest is tax-free. The trade-off is that your money stays locked in for a long time.

The key points

You can open a PPF account at a post office or an authorised bank.
You deposit between ₹500 and ₹1,50,000 in a financial year (April to March).
The account runs for 15 years, counted from the end of the financial year in which you open it.
The government sets the interest rate every quarter. For October to December 2026 it is 7.1% a year.
The interest and the money you receive at maturity are free of income tax.

What is PPF?

PPF runs under the Public Provident Fund Scheme, 2019, which was notified by the Ministry of Finance. In simple words: you open an account, deposit money during the year, and the government pays you interest on your balance. You cannot take all your money out before the 15 years are over. The scheme does allow a loan and a part-withdrawal at certain points, which we explain in our guide to PPF withdrawal, loan and extension rules.

PPF at a glance

Feature	What the rules say
Who runs it	Government of India. Accounts are held at post offices and authorised banks.
Who can open one	An individual. A parent or guardian can also open one account for each minor child. Joint accounts are not allowed.
How many accounts	One account in your own name, at either a post office or a bank.
Yearly deposit	At least ₹500 and at most ₹1,50,000 in a financial year, in multiples of ₹50. The limit includes deposits in a minor’s account that you operate.
Lock-in	15 years, counted from the end of the financial year in which you opened the account.
Interest	Set by the government every quarter. 7.1% a year for October to December 2026. Added to your account at the end of each financial year.
Tax	Deposits can qualify for a deduction under the old tax regime. Interest and the maturity amount are tax-free. See our PPF tax guide.
After 15 years	Close the account, keep it without new deposits, or extend it with deposits in blocks of 5 years.

How PPF works, step by step

Open the account. Visit a post office or an authorised bank with the application form and your KYC documents. You need at least ₹500 to start. Our guide on how to open a PPF account lists the documents.
Deposit during the year. You can deposit in one lump sum or in instalments, within the yearly limit. You must deposit at least ₹500 every financial year. If you miss a year, the account is treated as discontinued. It can be revived by paying a ₹50 fee plus ₹500 for each year missed.
Earn interest. Interest is worked out every month on the lowest balance between the 5th and the last day of that month. It is added to your account once a year. This is why many people deposit before the 5th of the month. Read more in our guide to how PPF interest works.
Decide at maturity. After 15 years you choose to close the account, keep it without deposits, or extend it with deposits.

Things to think about

Your money is locked in. If you open the account in the 1st financial year, a loan is possible from the 3rd year and a part-withdrawal from the 7th year. Closing the account early is only allowed after 5 years and only for specific reasons.
The rate is not fixed for 15 years. The government reviews it every quarter and the new rate applies to your whole balance. It has stayed at 7.1% for many quarters, but nothing guarantees that it will.
There is a yearly cap. You cannot put in more than ₹1,50,000 in a financial year, however much you want to save.
The tax deduction depends on your regime. You can claim a deduction for deposits only under the old tax regime. The interest stays tax-free under either regime.

A worked example

Suppose you deposit ₹1,50,000 by 5 April every year for 15 years, and the rate stays at 7.1%. You would have about ₹40.68 lakh at the end. Of that, ₹22.5 lakh is your own money and about ₹18.18 lakh is interest. Because the rate can change, treat this as an estimate. You can try your own numbers with our free PPF calculator.

Sources

Last checked: 27 October 2026. Rates and rules can change, so confirm the latest details with your bank or India Post before you act. This guide is general information, not financial advice.