How PPF Works and Why It Stays Popular
The Public Provident Fund (PPF) is a government-backed savings scheme with a 15-year lock-in, making it one of the safest long-term investment options in India. Both the interest earned and the maturity amount are completely tax-free, which is why it remains a favourite for conservative savers.
PPF interest is compounded annually and the rate is reviewed by the government every quarter. You can invest between ₹500 and ₹1.5 lakh per year, and contributions qualify for deduction under Section 80C. After 15 years, you can extend the account in blocks of 5 years.
Frequently Asked Questions
Is PPF maturity amount taxable?
No. PPF falls under the EEE (Exempt-Exempt-Exempt) category — your contributions, the interest earned, and the maturity amount are all completely tax-free.
What is the current PPF interest rate?
The PPF rate is currently 7.1% per annum, compounded yearly. The government reviews and revises it every quarter.
Can I withdraw PPF before 15 years?
Partial withdrawals are allowed from the 7th year onwards, subject to limits. The full amount can only be withdrawn at maturity after 15 years.