In the PPF scheme post office savers earn 7.1% yearly in this October to December quarter, compounded once a year and completely tax free. The Public Provident Fund runs for 15 years and takes deposits from ₹500 to ₹1.5 lakh in each financial year.
PPF is the one post office scheme where the deposit, the interest and the maturity amount are all free of tax under the old regime. This hub covers the returns, the rules for deposits, loans and withdrawals, extensions, and how it compares with other options. It is an independent guide; the official scheme page sits on India Post's site.
At a glance
Rate
7.1% a year (reviewed quarterly)Term
15 years, extendable in 5 year blocksDeposit
₹500 to ₹1.5 lakh a yearTax
Deposit deductible, interest and maturity tax freeLoan
Years 3 to 6Partial withdrawal
From year 7, once a year
Post office PPF scheme 15 years: what it can grow to
| Deposit every year | Total deposited | Value after 15 years |
|---|---|---|
| ₹12,000 (₹1,000 a month) | ₹1.8 lakh | About ₹3.25 lakh |
| ₹50,000 | ₹7.5 lakh | About ₹13.56 lakh |
| ₹1 lakh | ₹15 lakh | About ₹27.12 lakh |
| ₹1.5 lakh | ₹22.5 lakh | About ₹40.68 lakh |
Assumes 7.1% for all 15 years and deposits before 5 April. The PPF calculator shows a yearly table, and the rate may change in future quarters.
How the PPF scheme post office rate is applied
Interest is calculated each month on the lowest balance between the 5th and the end of that month, and credited once a year on 31 March. That is why depositing before the 5th, and ideally before 5 April for the whole year, earns the most. The PPF rate is not locked: unlike NSC or SCSS, it can change every quarter for the whole balance.
PPF account interest rate in post office and other common questions
The PPF account interest rate in post office, the PPF rate of interest in post office and the interest rate of PPF in post office all mean 7.1% this quarter. Post office PPF scheme details are identical at banks. Post office PPF scheme in Hindi brochures are available at counters for those who prefer them. People asking about a post office PPF scheme for 10 years should know the minimum term is 15 years; the PPF saving scheme cannot be shortened except under the premature closure rules below.
PPF scheme in post office: rules on deposits
- Each person may hold just one PPF, either with the post office or with a bank.
- A parent can open one for a minor child; the combined deposit of parent and child counts toward one ₹1.5 lakh limit.
- Deposit at least ₹500 each year, in multiples of ₹50, up to ₹1.5 lakh. Any number of deposits in a year is fine.
- Missing the ₹500 minimum makes the account discontinued; revive it with ₹50 penalty per missed year plus the dues.
- NRIs cannot open new accounts, and joint accounts are not allowed.
PPF for children and families
A parent can open a PPF in a child's name and keep depositing until the child turns 18, when the child takes over. The deposits in the child's account and the parent's own account together cannot exceed ₹1.5 lakh in a year. Grandparents cannot open one for a grandchild unless they are the legal guardian. For a boy child in particular, a PPF in his name is one of the most common long term choices; see schemes for a boy child.
Because the account matures after 15 full financial years, a PPF opened when a child is three matures around age 18 or 19, which lines up well with college costs.
Loans, withdrawals and early closure
| Facility | When | How much |
|---|---|---|
| Loan | From the 3rd to the 6th financial year | Up to 25% of the balance at the end of the second year before; interest 1% above the PPF rate |
| Partial withdrawal | From the 7th financial year, once a year | Up to 50% of the lower of two past balances |
| Premature closure | After 5 complete years | Only for serious illness, higher education, or change of residence abroad; 1% less interest |
For other ways to borrow against post office savings, see post office loans.
Extending PPF after 15 years
At maturity you can close the account, or extend it in blocks of five years, either with fresh deposits (apply within a year of maturity) or without. Extended accounts keep earning the current PPF rate, tax free. Many savers extend to keep a tax free balance growing into retirement.
Common PPF mistakes and fixes
| Mistake | Fix |
|---|---|
| Depositing after the 5th of the month | Move deposits to the first few days, or do one deposit before 5 April |
| Missing the yearly ₹500 | Revive with ₹50 a year penalty plus dues |
| Depositing more than ₹1.5 lakh | The excess earns no interest and is refunded |
| Letting it mature unnoticed | Decide to extend or close within a year of maturity |
The other tax saving options are compared on NSC tax and the 5 year FD page.
Tax: why PPF is called EEE
Exempt on deposit (up to ₹1.5 lakh, under section 123 of the new Income-tax Act, the old 80C, in the old regime), exempt on interest, and exempt at maturity. Under the new regime the deposit deduction is lost, but the interest and maturity stay tax free, which still makes PPF attractive for higher slab earners.
PPF in post office vs at a bank
The rules and rate are identical, because PPF is a government scheme. Choose whichever suits you for service. Banks often have easier online deposits; the post office is closer in many small towns. An account can be moved between a post office and a bank without breaking it.
PPF compared with other post office schemes
| PPF | NSC | RD | |
|---|---|---|---|
| Rate | 7.1% | 7.7% | 6.7% |
| Lock | 15 years | 5 years | 5 years |
| Interest taxed | No | Yes | Yes |
For a 15 year goal, PPF's tax free compounding usually beats taxable options. For shorter goals, NSC or the RD fit better.
Frequently asked questions
What is the post office PPF interest rate now?
7.1% yearly in October to December, with interest added each March.
Is the PPF rate fixed for 15 years?
No. It can change every quarter, and the new rate applies to your whole balance.
Fifteen years of ₹1.5 lakh deposits: what is the PPF maturity?
About ₹40.68 lakh at 7.1%, all tax free.
Can I open PPF in both a bank and a post office?
No. No; the rule is a single PPF per person.
Can I withdraw PPF before 15 years?
Partly, once a year from the 7th year, or close it after 5 years for specific reasons with a 1% cut in interest.
Is PPF interest taxable?
No. PPF interest and maturity are tax free.
Can I move my PPF from a bank to the post office?
Yes. Ask the bank for a transfer to the chosen post office. The account keeps its opening date and balance.