PPF Account Rules 2026: Interest Rate, Limits, Loan and Withdrawal

The Public Provident Fund (PPF) pays 7.1% a year for the October–December 2026 quarter, unchanged from the previous quarter, and the core rules are simple: invest between Rs 500 and Rs 1.5 lakh each financial year, for 15 years, with tax-free interest. The details that trip people up are the loan window, partial withdrawals, extension blocks and the 5th-of-the-month deadline. This guide explains every rule with worked examples so you can plan your contributions with confidence.

Updated November 2026. Small savings rates are reviewed every quarter and rules can change. Confirm with India Post, your bank or the National Savings Institute, and speak to a tax adviser for your own situation.

PPF at a glance: current rate and key limits

Feature	Rule
Interest rate (Oct–Dec 2026)	7.1% a year, compounded annually
Minimum deposit	Rs 500 per financial year
Maximum deposit	Rs 1,50,000 per financial year (including any minor’s account you operate)
Deposit pattern	Lump sum or instalments, in multiples of Rs 50
Tenure	15 years from the end of the financial year in which the account was opened
Extension	Unlimited 5-year blocks, with or without deposits
Loan	3rd to 6th financial year, up to 25% of balance at end of the 2nd preceding year
Partial withdrawal	From the 7th financial year, once a year, up to 50% of a specified balance
Premature closure	After 5 years, only for specific reasons, with 1% lower interest
Joint account	Not allowed
Where to open	Post offices and authorised banks

The government kept small savings rates unchanged for the October–December 2026 quarter, as reported by Business Today and others citing the Finance Ministry notification of 30 September 2026. Outlets differ on whether this is the ninth or tenth quarter in a row without change, but the 7.1% PPF rate itself is not in dispute. The next review covers January–March 2027 and is usually announced on the last working day of December.

How PPF interest is calculated (and the 5th-of-the-month rule)

Interest is calculated every month on the lowest balance in the account between the close of the 5th day and the end of that month. It is credited once, at the end of the financial year.

In practice:

• Money deposited on or before the 5th earns interest for that month.
• Money deposited on the 6th or later earns nothing for that month.
• A lump sum deposited by 5 April earns interest for all 12 months of the financial year.

Worked example: timing matters

Say you put Rs 1,50,000 into PPF each year. Deposited by 5 April, it earns a full year at 7.1%, about Rs 10,650 in the first year. If you deposit the same amount on 10 April, you lose April’s interest, roughly Rs 890 in that first year. Over 15 years, with compounding, that small delay adds up to tens of thousands of rupees. If you invest monthly, set the standing instruction or UPI reminder for the 1st to 4th of each month.

Deposit rules and what happens if you miss a year

• You must deposit at least Rs 500 in each financial year. If you miss, the account becomes “discontinued”.
• A discontinued account cannot get loans or partial withdrawals, though the existing balance keeps earning interest.
• To revive it during the 15-year term, pay a fee of Rs 50 plus the Rs 500 minimum for each year you missed.
• Deposits above Rs 1.5 lakh in a year do not earn interest and are returned.
• Only one PPF account is allowed per individual, plus one for each minor (or person of unsound mind) for whom you are guardian. Joint accounts are not permitted.

Irregular accounts: rules in force since 1 October 2024

The finance ministry issued guidelines to regularise irregular small savings accounts, effective 1 October 2024. In short: a minor’s PPF account earns the post office savings rate until the minor turns 18, after which normal PPF interest applies; if a person has more than one PPF account, the primary account earns the scheme rate, a second account can be merged into it within the yearly limit, and any further accounts earn no interest. NRIs cannot open new PPF accounts. If any of this applies to your family, ask your post office or bank branch how your accounts are being treated.

PPF loan rules: years 3 to 6

A loan lets you borrow from your own PPF balance in the early years before withdrawals are allowed.

Rule	Detail
When	From the 3rd financial year to the end of the 6th financial year
How much	Up to 25% of the balance at the end of the second year before the year you apply
How many	One loan per financial year; a new loan only after the previous one is fully repaid
Repayment	Within 36 months, in a lump sum or instalments
Interest	1% a year if repaid within 36 months; 6% a year if not
How to apply	Submit the loan application form at the post office or bank that holds your account

Worked example: loan eligibility

Suppose you opened the account in FY 2024-25 and want a loan in FY 2026-27, your 3rd financial year. The limit is 25% of the balance on 31 March 2025 (the end of the second preceding year). If that balance was Rs 1,60,000, you can borrow up to Rs 40,000. Repay it within 36 months and the cost is just 1% a year, though the borrowed amount does not earn PPF interest while it is out.

Partial withdrawal rules: year 7 onwards

Withdrawal is allowed once every financial year after five years have passed from the end of the year in which the account was opened, which in practice means from the 7th financial year. The limit is 50% of the lower of:

• the balance at the end of the fourth financial year before the year of withdrawal, or
• the balance at the end of the year immediately before the withdrawal.

Any outstanding loan and its interest must be repaid first. You do not repay a withdrawal.

Worked example: withdrawal limit

An account opened in FY 2019-20 becomes eligible for withdrawal in FY 2025-26. For a withdrawal in FY 2026-27, compare the balance on 31 March 2023 (fourth preceding year) and on 31 March 2026 (preceding year). If those were Rs 6,00,000 and Rs 10,50,000, the lower figure is Rs 6,00,000, so the maximum withdrawal is Rs 3,00,000.

Maturity and extension: what to do after 15 years

The account matures 15 years after the end of the financial year in which you opened it. An account opened in, say, June 2012 (FY 2012-13) matures on 1 April 2028. At maturity you have three choices.

Option	How it works	Withdrawals
Close the account	Apply on the closure form and take the full balance with interest	Entire balance
Extend without deposits	Do nothing; the account continues and keeps earning interest	Any amount, once a year
Extend with deposits	Submit the extension form within one year of maturity for a 5-year block	Up to 60% of the balance at the start of the block, spread over the block, once a year

Two warnings. If you keep depositing after maturity without submitting the extension form in time, those deposits are treated as irregular and refunded without interest. And once an account has run without deposits for more than a year, you cannot switch it back to the with-deposit option for that block.

Maturity calculation examples

These figures assume the rate stays at 7.1% for the full period and that each yearly amount is deposited by 5 April. Real returns will differ if the rate changes.

Yearly deposit	Total invested (15 yrs)	Approx. maturity value	Approx. interest earned
Rs 12,000 (Rs 1,000 a month)	Rs 1,80,000	Rs 3,25,500	Rs 1,45,500
Rs 60,000 (Rs 5,000 a month)	Rs 9,00,000	Rs 16,27,300	Rs 7,27,300
Rs 1,50,000	Rs 22,50,000	Rs 40,68,200	Rs 18,18,200

If the Rs 1.5 lakh investor then extends for one 5-year block, the balance would grow to about Rs 57.3 lakh without fresh deposits, or about Rs 66.6 lakh if they keep depositing Rs 1.5 lakh a year, again assuming 7.1% throughout.

Premature closure: when it is allowed

You cannot close a PPF account before five years from the end of the opening year. After that, premature closure is allowed only for:

1. treatment of a life-threatening disease of the account holder, spouse, dependent children or parents, with medical documents;
2. higher education of the account holder or dependent children, with admission and fee documents; or
3. a change in residency status of the account holder, with passport, visa or tax return proof.

On premature closure, interest for the whole period is recalculated at 1% below the rates that applied. The full rule text is in the PPF Scheme notification on the National Savings Institute site.

Tax treatment of PPF

• Deposits: under the old tax regime, PPF deposits qualify for the deduction long known as Section 80C, within the overall Rs 1.5 lakh limit. The new tax regime does not give this deduction.
• Interest and maturity: tax-free under both regimes.
• Protection: the PPF balance cannot be attached by a court order for the account holder’s debts.

The Income-tax Act, 2025 replaced the 1961 Act from 1 April 2026, and many section numbers changed. Check the current section reference with your CA or the income tax portal when filing.

How to open and manage a PPF account

1. Choose a post office or an authorised bank (most large public and private banks offer PPF, often online if you have a savings account there).
2. Submit the account opening form with KYC: Aadhaar, PAN, a photograph and address proof.
3. Make the first deposit of at least Rs 500.
4. Add a nominee at the time of opening. You can change it later.
5. Set a yearly reminder for 1–4 April for lump-sum deposits, or the 1st–4th of each month for instalments.
6. Download the passbook or statement every April and check the interest credit.
7. Keep a copy of the PPF Scheme, 2019 notification (India Post) for reference if a branch quotes a rule you are unsure about.

Frequently Asked Questions

What is the PPF interest rate for October–December 2026?

7.1% a year, compounded annually. The government reviews small savings rates every quarter.

Can I have two PPF accounts?

No. Only one account per individual is allowed, apart from accounts you open as guardian for minors. Under the rules in force since October 2024, a second account in your own name may be merged into the first, and extra accounts earn no interest.

When can I take a loan against PPF?

From the 3rd to the 6th financial year, up to 25% of the balance at the end of the second preceding year. Interest is 1% a year if repaid within 36 months.

When can I withdraw money from PPF?

From the 7th financial year, once a year, up to 50% of the lower of the balance at the end of the 4th preceding year or the immediately preceding year.

What happens if I miss the minimum deposit in a year?

The account becomes discontinued. You can revive it by paying Rs 50 per missed year plus the Rs 500 minimum for each of those years.

Is PPF better than an FD?

PPF offers tax-free interest and a government guarantee but locks money for 15 years with limited access. FDs are more flexible but interest is taxable. The right mix depends on your goals and tax bracket, so speak to a financial adviser.

A simple PPF plan for this year

Decide your yearly PPF amount now, set it up to go in before 5 April 2027 (or before the 5th of each month), and write down your account’s opening year so you know exactly when the loan and withdrawal windows open. Those three steps capture almost all the value PPF offers.