Quick Answer: PPF (Public Provident Fund) offers EEE (Exempt-Exempt-Exempt) tax status — contributions up to ₹1.5L/year eligible for 80C deduction, interest is tax-free, and maturity is tax-free. Current PPF interest rate is 7.1% p.a. (compounded annually, credited on 31 March). Minimum subscription ₹500/year; maximum ₹1.5 lakh/year. Maturity is 15 years, extendable in 5-year blocks.
PPF — India's Best Risk-Free Long-Term Investment
Public Provident Fund (PPF) is a government-backed savings scheme with sovereign guarantee, offering 7.1% tax-free returns. It enjoys EEE (Exempt-Exempt-Exempt) status, making it highly attractive for long-term wealth creation, especially for those in higher tax brackets.
PPF Key Features
| Feature | Details |
|---|---|
| Current Rate | 7.1% p.a. (FY 2025-26) |
| Minimum Investment | ₹500 per year |
| Maximum Investment | ₹1,50,000 per year |
| Lock-in Period | 15 years (extendable in 5-yr blocks) |
| Tax Status | EEE (contribution, interest, maturity) |
| Loan Facility | After 3rd year (up to 25% of balance) |
| Partial Withdrawal | After 7th year |
| Risk | Zero (sovereign guarantee) |
Frequently Asked Questions
Yes. After the 15-year maturity, you can extend PPF in 5-year blocks with or without fresh contributions. If you extend with contributions, the full ₹1.5L/yr limit continues. If extended without contributions, the balance continues earning interest tax-free until withdrawal.
PPF interest is calculated on the minimum balance between the 5th and end of month. To maximise interest, invest before April 5 each year — this ensures the full annual deposit earns interest for all 12 months. Investing after April 5 means you lose a month's interest on that instalment.