Fifteen years, a rate the government resets every quarter, and interest that compounds once a year rather than every month. This works out the maturity value, and what it is worth once inflation is counted.
Rate 7.1% for July to September 2026. Checked 20 August 2026.
₹1,50,000 a year for 15 years at 7.1% matures at ₹40,68,209 after 15 years. You pay in ₹22.50 L; the rest, ₹18.18 L, is interest.
The scheme allows ₹500 to ₹1,50,000 a year
The default rate is 7.1% for July to September 2026, Ministry of Finance, Department of Economic Affairs. Rates are reviewed quarterly, so check the current one before relying on a long projection, and change the field above if yours differs.
| Year | Opening | Paid in | Interest | Closing |
|---|---|---|---|---|
| 1 | ₹0 | ₹1.50 L | ₹10,650 | ₹1.61 L |
| 2 | ₹1.61 L | ₹1.50 L | ₹22,056 | ₹3.33 L |
| 3 | ₹3.33 L | ₹1.50 L | ₹34,272 | ₹5.17 L |
| 4 | ₹5.17 L | ₹1.50 L | ₹47,355 | ₹7.14 L |
| 5 | ₹7.14 L | ₹1.50 L | ₹61,368 | ₹9.26 L |
| 6 | ₹9.26 L | ₹1.50 L | ₹76,375 | ₹11.52 L |
| 7 | ₹11.52 L | ₹1.50 L | ₹92,447 | ₹13.95 L |
| 8 | ₹13.95 L | ₹1.50 L | ₹1.10 L | ₹16.54 L |
| 9 | ₹16.54 L | ₹1.50 L | ₹1.28 L | ₹19.32 L |
| 10 | ₹19.32 L | ₹1.50 L | ₹1.48 L | ₹22.30 L |
| 11 | ₹22.30 L | ₹1.50 L | ₹1.69 L | ₹25.49 L |
| 12 | ₹25.49 L | ₹1.50 L | ₹1.92 L | ₹28.91 L |
| 13 | ₹28.91 L | ₹1.50 L | ₹2.16 L | ₹32.57 L |
| 14 | ₹32.57 L | ₹1.50 L | ₹2.42 L | ₹36.49 L |
| 15 | ₹36.49 L | ₹1.50 L | ₹2.70 L | ₹40.68 L |
Interest is credited once a year, on the closing balance, at the rate for that period. This page compounds annually for that reason, and it is why the figure here is lower than a calculator that quietly compounds monthly.
The contribution is treated as paid at the start of the year, which earns a full year of interest. That is what happens if the money is in before the 5th of April. PPF credits interest on the lowest balance between the 5th and the last day of each month, so a deposit made on the 6th earns nothing for that month, and a contribution spread across the year earns materially less than the same amount paid in April.
The rate shown is the current quarter’s. It is not fixed for the term: the Ministry of Finance resets small savings rates every quarter, so a fifteen-year projection at today’s rate is an illustration rather than a contract.
The rate will change, probably many times. PPF has paid as much as 12% and as little as 7.1% within living memory. Projecting fifteen years at one rate is the only practical thing to do and it is not a forecast.
It assumes you pay the same amount every year on time. Miss a year entirely and the account is treated as discontinued until a penalty and the arrears are paid.
It does not model partial withdrawals, which are allowed from the seventh year, or the loan facility available from the third. Both reduce the balance that compounds.
And it does not model the tax benefit, which is a real part of PPF’s return for anyone in the old regime and worth nothing to somebody in the new one.
₹40.68 lakh after the full fifteen-year term, at the current 7.1%. You pay in ₹22.5 lakh and the other ₹18.18 lakh is interest.
In today’s money, at 6% inflation, that ₹40.68 lakh has the purchasing power of about ₹16.98 lakh. The account is comfortably ahead of inflation in real terms, and it is not a wealth-building engine on its own.
Annually. The interest is calculated monthly on the lowest balance between the 5th and the last day of the month, but it is only credited to the account once a year, at the end of the financial year. This distinction is worth knowing because a calculator that compounds monthly will show you a larger number than you will actually receive, and several do.
Before the 5th of April. Because interest is computed on the lowest balance between the 5th and the last day of each month, a lump sum paid on 4 April earns interest for all twelve months of the year, while the same amount paid on 6 April earns for eleven. On ₹1.5 lakh at 7.1% that single day is worth about ₹887 a year, and repeated across a fifteen-year term with compounding it is a meaningful amount for no effort at all.
Exempt at all three stages: the contribution qualifies for deduction under Section 123 of the Income-tax Act 2025, formerly Section 80C, the interest is not taxed as it accrues, and the maturity amount is not taxed on withdrawal. Very few Indian instruments are exempt at all three points, and it is the strongest argument for the scheme. The deduction is available under the old regime only, so for somebody in the new regime the benefit is the tax-free interest and maturity rather than the deduction.
Yes, in blocks of five years, with or without further contributions, and the extension is where PPF becomes interesting. Extending to twenty-five years while continuing to pay ₹1.5 lakh takes the maturity value to about ₹1.03 crore, of which ₹65.58 lakh is interest, because the balance compounding in the later years is very large. The extension has to be requested within a year of maturity; miss the window and the account continues without further contributions.
Partially, from the seventh year, subject to limits based on the balance at the end of the fourth preceding year. A loan is available between the third and sixth years. Complete premature closure is allowed only in narrow circumstances, principally a serious illness or higher education, and carries a one percentage point reduction in the interest rate for the whole life of the account. Treat the money as locked and be pleasantly surprised.
They are answering different questions. PPF gives a government-backed, tax-free return with no market risk and a fifteen-year lock-in; an equity fund gives a market-linked return with no ceiling and no floor. Over long periods Indian equity has returned considerably more, and it has done so with years of declines that PPF has never had. The useful framing is not which wins but what proportion of your money should be in something that cannot fall, and that is a question about you rather than about the instruments.
No. One account per person, and the ₹1.5 lakh annual ceiling applies across all your accounts including any opened for a minor where you are the guardian. Accounts opened in breach of this are liable to be closed with interest reversed, so a second account is not a way to double the limit.
7.1% for July to September 2026, set by the Ministry of Finance, Department of Economic Affairs. Small savings rates are reviewed every quarter and this one has been unchanged for ten consecutive quarters.
₹1,50,000 across all accounts in your name, including any you operate for a minor. The minimum is ₹500 a year, and failing to pay it makes the account discontinued until a penalty and the arrears are cleared.
No. PPF is exempt at contribution, at accrual and at maturity. The contribution deduction sits under Section 123 of the Income-tax Act 2025, formerly Section 80C, and is available under the old regime only, but the tax-free interest and maturity apply in both regimes.
The account becomes discontinued. It stops being eligible for a loan or partial withdrawal until it is revived, which needs a penalty of ₹50 per missed year plus the ₹500 minimum for each of those years. The balance keeps earning interest in the meantime.
A non-resident cannot open a new PPF account. An account opened while resident may generally be continued to maturity but not extended beyond it. The rules here have changed more than once, so it is worth confirming your own position rather than relying on a general answer.
At current rates PPF pays more than most bank deposits and its interest is tax free, which widens the gap considerably for anyone in the 30% bracket. A deposit is liquid and PPF is locked for fifteen years. They are not substitutes and the comparison should be made after tax, which the FD calculator does.
Talk to the desk
The ₹1.5 lakh ceiling means it can only ever do part of the job, and what the rest of the money should be doing depends on your horizon and what you already hold. Bring your figures and we will look at the whole picture.
