What is the Public Provident Fund (PPF)?
The Public Provident Fund (PPF) is a long-term savings scheme backed by the Government of India, with a base tenure of 15 years. It offers the rare EEE (Exempt-Exempt-Exempt) tax status — contributions, interest earned every year, and the final maturity amount are all completely tax-free. The current PPF interest rate is 7.10% p.a. (Q3 FY 2025-26), compounded annually.
PPF Calculation Formula
or iteratively: balance = (balance + deposit) × (1 + r), repeated for n years
where r is the annual interest rate, n is the tenure in years, and k is the year of each deposit.
Choosing Your PPF Investment Amount
Your yearly investment amount in a PPF account can be anything from ₹500 to ₹1,50,000 per financial year. The investment amount you pick drives both your Section 80C tax benefit and your final maturity: at 7.10%, an annual investment amount of ₹1.5 lakh grows to about ₹40.68 lakh over 15 years, while ₹50,000 a year grows to about ₹13.56 lakh. Deposit before the 5th of each month so the full investment amount earns interest for that month.
See our step-by-step HDFC PPF auto-debit setup guide and the detailed PPF Calculator HDFC walkthrough.PPF Key Features
- Tenure: 15 years (extendable in blocks of 5)
- Minimum: ₹500 per year · Maximum: ₹1,50,000 per year
- Interest Rate: 7.10% (Q3 FY 2025-26), compounded annually
- Tax Benefit: Section 80C deduction up to ₹1.5L + tax-free interest + tax-free maturity (EEE)
- Partial Withdrawal: allowed from Year 7
- Loan Facility: available from Year 3 to Year 6
- Account Limit: one PPF account per person, across all banks and post offices
PPF in HDFC, SBI, ICICI & Post Office
Because PPF is a central-government scheme, the rate, tenure and rules are identical whether you open the account at HDFC Bank, SBI, ICICI Bank or your local Post Office. The maturity figure shown above applies to any of these. Most banks also let you set up an auto-debit standing instruction so you can run a monthly PPF "SIP".
PPF EEE Tax Treatment
- Exempt on investment: contributions qualify under Section 80C (up to ₹1.5L/year).
- Exempt on growth: interest credited each year is fully tax-free.
- Exempt on withdrawal: the final maturity amount is tax-free.
For a person in the 30% tax slab, depositing the full ₹1.5L every year saves roughly ₹46,800 in tax annually (30% + 4% cess on ₹1.5L), in addition to earning compounded interest.
PPF Example — ₹1.5L per year for 15 years at 7.10%
An annual deposit of ₹1.5 lakh for the full 15-year tenure at 7.10% matures to approximately ₹40.68 lakh — that is ₹22.5 lakh invested and around ₹18.18 lakh of tax-free interest. Extend the account for another 5 years and the corpus crosses ₹66 lakh.