PPF interest: 7.1% rate, the 5th-of-month rule and maturity

PPF interest is 7.1% a year for October to December 2026, unchanged from the previous quarter. Interest is worked out every month on the lowest balance between the 5th and the end of the month, and added to the account once a year. That one rule explains why the date you deposit matters.

The 5th-of-month rule

For each month, interest is calculated on the lowest balance between the close of the 5th day and the end of the month. A deposit on the 4th counts for that month; a deposit on the 6th does not. A full year’s deposit made by 5 April earns interest for all twelve months, which is what the PPF calculator assumes.

Worked examples at 7.1%

In the 15-year case, interest is ₹18,18,209, about four-fifths of what you put in. The extensions show compounding at work: years 16 to 25 more than double the 15-year value.

Rules that matter

• Deposits: at least ₹500 and at most ₹1,50,000 in a financial year, in multiples of ₹50.
• Maturity: after 15 years from the end of the year of opening. You can then extend in blocks of 5 years, with or without fresh deposits.
• Loans: available from about the 3rd to the 6th year.
• Partial withdrawal: allowed after 5 years from the end of the year of opening, which is from the 7th year.
• Early closure: only after 5 years, and only for reasons such as a life-threatening illness, higher education or a change of residency.
• Tax: interest and the maturity amount are tax-free. Deposits give a deduction only in the old tax regime.

The rate can change

The government sets small-savings rates every quarter. The calculator uses one rate for every year, so treat the result as an estimate and re-run it when the rate changes.

How to use the PPF calculator

1. Enter your yearly deposit (₹500 to ₹1.5 lakh).
2. Keep 7.1% or try another rate.
3. Choose 15 years or a longer period with extensions, and open the yearly table.

Saving for a daughter under 10? The Sukanya Samriddhi calculator uses a higher rate; see the Sukanya Samriddhi Yojana guide. Other post office options are in post office scheme rates.