The PPF interest rate is 7.1% per annum, compounded annually — unchanged since April 2020 and retained for the July-September 2026 quarter. Interest is fully tax-free under Section 10(11) and the deposit qualifies for a Section 80C deduction up to ₹1.5 lakh a year (available only in the old tax regime). PPF enjoys EEE status — deposit, interest and maturity are all exempt. Tenure is 15 years, minimum ₹500 and maximum ₹1.5 lakh a year.
PPF Interest Rate History
The government reviews small-savings rates every quarter (April, July, October, January). PPF has stayed at 7.1% for over five years — the longest stable stretch in its history.
| Period | PPF Rate (p.a.) | Remarks |
|---|---|---|
| Apr 2020 – present | 7.1% | Current rate — held for Jul-Sep 2026 quarter |
| Jan 2019 – Mar 2020 | 8.0% | Cut to 7.1% from 1 Apr 2020 |
| Oct 2018 – Dec 2018 | 8.0% | Raised from 7.6% |
| Jul 2017 – Sep 2018 | 7.6% | Reduced from 7.8% |
| Apr 2017 – Jun 2017 | 7.9% | Reduced from 8.0% |
| Apr 2016 – Mar 2017 | 8.0% | Quarterly reset era begins |
| Apr 2013 – Mar 2016 | 8.7% | High-rate era |
Rate for the current quarter confirmed by the Finance Ministry small-savings notification dated 30 June 2026 (7.1% for Jul-Sep 2026).
PPF interest is calculated on the minimum balance between the 5th and the last day of each month. Deposit on or before the 5th (ideally by 5 April for a lump sum) so the whole month's balance earns interest. Interest is credited on 31 March each year.
PPF Tax Status — EEE Explained
PPF is one of very few instruments with Exempt-Exempt-Exempt (EEE) status — tax-free at deposit, on interest and at maturity.
| Stage | Treatment | Section |
|---|---|---|
| Deposit (up to ₹1.5L) | Deductible — old regime only | 80C |
| Annual interest (7.1%) | Exempt | 10(11) |
| Maturity / withdrawal | Exempt | 10(11) |
The 80C deduction is not available under the new tax regime; the 10(11) interest & maturity exemption applies under both regimes.
If you have opted for the new tax regime, your PPF deposit does not reduce taxable income (80C is not allowed). The 7.1% interest and the maturity amount remain fully exempt regardless of regime, so PPF is still a valid tax-free savings vehicle — just without the upfront deduction.
Not sure whether old or new regime saves you more on your PPF and other deductions?
Talk to a Tax Expert →PPF vs NSC vs NPS vs ELSS vs SGB
How PPF compares with other popular tax-saving and long-term instruments on return, taxability and lock-in for FY 2025-26.
| Instrument | Return | Tax on returns | 80C / other | Lock-in |
|---|---|---|---|---|
| PPF | 7.1% fixed | Exempt (EEE) · 10(11) | 80C ₹1.5L | 15 years |
| NSC | 7.7% fixed | Interest taxable at slab (reinvested interest 80C-eligible) | 80C ₹1.5L | 5 years |
| NPS (Tier I) | Market ~9-11% | 60% tax-free / 40% annuity taxable at maturity | 80CCD(1B) extra ₹50K; 80CCD(2) employer | Till age 60 |
| ELSS | Market (equity) | Equity LTCG 12.5% above ₹1.25L; STCG 20% | 80C ₹1.5L | 3 years |
| SGB | 2.5% interest + gold price | Interest taxable at slab; redemption on maturity capital-gains exempt | — | 8 years (5-yr exit) |
PPF/NSC/ELSS 80C limit is old-regime only. 80CCD(1B) ₹50K and employer 80CCD(2) are allowed even in the new regime. Equity rates per Sections 111A/112A (transfers on/after 23 Jul 2024).
PPF — safe & tax-free
- Sovereign-backed, zero market risk
- Interest & maturity fully exempt (EEE)
- Fixed rate, reset quarterly
- Best for guaranteed, tax-free long-term savings
✓PPF suits you if
- You want a guaranteed, tax-free return
- You can lock funds for the long term
- You are in the old regime and want 80C
- You prefer zero market risk
!Look elsewhere if
- You want higher, market-linked growth (ELSS/NPS)
- You need liquidity before year 7
- You are in the new regime and value only the deduction
- You have already used the ₹1.5L 80C limit
PPF Maturity — What ₹1.5L a Year Grows To
Investing the maximum ₹1.5 lakh a year (₹12,500 a month) at 7.1% for the full 15-year term, all interest and the maturity amount are tax-free.
PPF at 7.1% for 15 years
80C tax saved (30% slab)
Figures are illustrative at a constant 7.1%; actual maturity varies with future quarterly rate resets. Estimate your slab benefit with the income-tax calculator.
PPF — Key Rules at a Glance
- Minimum ₹500 and maximum ₹1,50,000 per financial year
- 15-year tenure, extendable in 5-year blocks (with or without contribution)
- Partial withdrawal allowed from the 7th financial year
- Loan against PPF available from the 3rd to 6th financial year
- One account per person; one minor account per parent (joint not allowed)
- NRIs cannot open new PPF; existing accounts run till maturity
Unlike PPF's fixed EEE treatment, ELSS and other equity gains are taxed under the post-23-July-2024 rules — LTCG 12.5% above ₹1.25 lakh under Section 112A, STCG 20% under Section 111A, no indexation. SGB interest is taxable at slab, but redemption on maturity is capital-gains exempt for individuals.
- PPF interest exemption — Section 10(11), Income-tax Act: incometax.gov.in
- Deposit deduction — Section 80C (old regime, ₹1.5 lakh)
- PPF rate 7.1% for Jul-Sep 2026 — Finance Ministry small-savings notification, 30 Jun 2026
- NSC 7.7% / SCSS 8.2% / KVP 7.5% same quarter; equity gains per Sections 111A & 112A
Disclaimer: This guide is general information based on the law and notifications in force when it was last updated. It is not professional advice for your case — rates, thresholds and due dates change, so check the current position or speak to our CA team before you act on it.