PPF par 7.1%
tax-free return

PPF (Public Provident Fund) ek long-term tax-free government savings scheme hai 1968 me launch hua. 15-saal ka tenure (extendable in 5-year blocks). Exempt-Exempt-Exempt (EEE) tax treatment — contribution deductible Section 80C ke under, interest fully tax-free, full maturity tax-free. Interest rate quarterly set hota hai Ministry of Finance se — typically 7.1% (most quarters since Q1 FY 2020-21). Minimum ₹500 per year, maximum ₹1.5 lakh per year. Yeh India ke safest long-term retirement savings products me se ek hai — government-backed, market risk nahi. Suited for risk-averse investors aur retirement corpus building.

PPF account khol sakte ho: (1) SBI aur most public sector banks (BoB, PNB, Canara, Union Bank, BoI, IOB, etc.). (2) Private banks: HDFC Bank, ICICI Bank, Axis Bank. (3) Post offices (any India Post branch). Online opening: SBI Yono, HDFC NetBanking, ICICI Internet Banking par directly possible. KYC required: PAN + Aadhaar + photo + initial deposit (₹500 minimum). Sirf ek PPF account per person legally allowed — duplicate account opened ho jata hai to second account 'irregular' treat hota hai aur interest reverse ho jata hai. Minor children ke account guardian alag se kholte hain — un ka ₹1.5L cap guardian ke ₹1.5L cap se combined hota hai (joint single limit).

7.1% per annum, quarterly set hota hai Ministry of Finance se. Most quarters since Q1 FY 2020-21 through FY 2025-26 yeh rate constant raha hai — Indicative FY 2026-27 me bhi continue ho raha hai (subject to quarterly review). Interest compound karta hai annually but calculate hota hai LOWEST balance between 5th aur last day of each month par — yani deposit 5th tak ho jaye to us mahine ka full interest milta hai. Historical rates: 7.1% (FY 2020-26), 7.9% (FY 2018-19), 8.7% (FY 2014-16), 8.8% (FY 2012-13). PPF rate trajectory typically follows government 10-year bond yield + small spread, so high-inflation years me higher rate, low-inflation years me lower.

EEE — Exempt-Exempt-Exempt tax treatment: (1) Contribution: ₹1.5 lakh tak Section 80C deduction PURANE regime me. 80C combined cap hai — EPF, ELSS, NSC, LIC, home loan principal, etc. ke saath share karta hai. (2) Interest: fully tax-free har saal credit hone par. (3) Maturity: pura corpus tax-free aap apne bank me transfer karte ho. Yeh India ke few EEE instruments me se ek hai. Naye tax regime me 80C deduction NAHI milti contribution side me — but EE on interest + maturity preserved hai. To naye regime me PPF still works for tax-free growth, sirf contribution-side deduction nahi milti.

7.1% rate par compound annual interest se: ₹1.5 lakh/year (₹12,500/month) for 15 years → corpus ~₹40.68 lakh on ₹22.5 lakh invested. Yani ~₹18 lakh interest, fully tax-free. Lower contributions: ₹5,000/month (₹60K/year) for 15 years → ~₹16.27 lakh. ₹1,000/month (₹12K/year) for 15 years → ~₹3.25 lakh. Extension to 25 years at max ₹1.5L contribution → corpus ~₹73 lakh. Extension to 35 years → corpus ~₹1.27 crore. Yeh figures 7.1% constant assume karte hain — actual rate quarterly vary kar sakta hai. PPF Calculator: /in/tools/ppf-calculator.

Original tenure 15 financial years hota hai (calculated as 15 + FY of opening). After 15 years, 3 options: (1) Full withdrawal — tax-free corpus aapke bank me transfer. (2) Extend 5-year blocks WITH new contributions (Form H file karo 1 saal andar maturity ke). (3) Extend WITHOUT new contributions — corpus continue interest earn karta hai, withdraw partial once per year, no Form H needed (default option). Premature closure: 5 saal ke baad allowed for medical treatment, higher education, ya NRI status change — with 1% interest penalty (rate notified me se 1% lower paid). Partial withdrawal: 7th year se onwards allowed, max 50% of balance at end of 4th preceding year OR end of preceding year (jo kam ho). Only ONE withdrawal per FY. Tax-free.

Loan facility 3rd se 6th year tak available hai (between 3rd aur 6th anniversary of opening). Maximum loan = 25% of balance at end of 2nd preceding FY. Example: 4th year me loan lene par balance at end of 2nd year (yani 2 years back) ka 25% available. Loan tenure: max 36 months for repayment. Interest on loan: 1% above PPF rate (current 7.1% + 1% = 8.1%), payable lump sum at repayment time. Loan repay karne ke baad aap fresh loan le sakte ho within same 3-6 year window. After 6th year, loan facility stop ho jati hai — partial withdrawal (year 7+) ka option remain karta hai. Loan default karne par PPF account active rehta hai but interest deducted at 6% additional rate till repayment.

Depends on aap kya prioritise karte ho: PPF — guaranteed 7.1% tax-free, ZERO market risk, suited for capital preservation, 15-year commitment. ELSS — potential 11-14% (equity returns), 3-year lock-in (shortest among 80C), full market risk, suited for younger investors with long horizon. NPS — 9-13% (equity-heavy lifecycle blends), lock-in till age 60, mandatory 40% annuity at exit, extra ₹50K 80CCD(1B) deduction beyond 80C ₹1.5L cap. Common allocation 30-year-old salaried investor: ₹50,000 PPF (safety, tax-free) + ₹1 lakh ELSS (equity growth) = ₹1.5L cap utilised. PLUS ₹50K NPS Tier 1 for 80CCD(1B) exclusive deduction = ₹2L total deductions old regime. PPF specifically for risk-averse + capital preservation + retirement supplementary corpus.

Existing PPF accounts (pre-NRI period me khole gaye): continue till 15-year maturity allowed, NEW contributions allowed, lekin EXTEND nahi kar sakte 15 years ke baad. Naya PPF account NRI status me OPEN nahi kar sakte. Practical implications: agar India me PPF account active hai aur foreign job pe ja rahe ho, account continue karo at home branch, contributions remit karo via NRO account. Interest tax-free in India lekin foreign country me US taxes (FBAR/Form 8938 disclosure for US-NRIs above thresholds). Repatriation of PPF maturity proceeds post-NRI conversion: full amount repatriable to NRE/NRO without RBI approval but Form 15CA/15CB required. Common pitfall: residency status mid-year change karne par compliance burden — proper documentation rakhi karo.