The Public Provident Fund (PPF) is a long-term, government-backed savings scheme in India that combines attractive returns with significant tax benefits. Introduced by the National Savings Institute, PPF enjoys EEE (Exempt-Exempt-Exempt) status — meaning your contributions, interest earned, and maturity amount are all tax-free under Section 80C of the Income Tax Act.
PPF accounts have a mandatory lock-in period of 15 years, which can be extended in blocks of 5 years after maturity. You can contribute between ₹500 and ₹1,50,000 per financial year, making it suitable for both small and large investors. The interest rate is set quarterly by the government — currently around 7.1% per annum — and is compounded annually, credited at the end of each financial year.
One of PPF's greatest advantages is its safety and tax efficiency. Unlike market-linked investments, PPF returns are guaranteed by the government. Combined with the ₹1.5 lakh deduction under Section 80C, it is one of the most recommended tax-saving instruments for salaried and self-employed individuals alike. Partial withdrawals are permitted from the 7th year onward under specific conditions.
For example, if you contribute the maximum ₹1,50,000 every year for 15 years at 7.1% interest, your total investment would be ₹22,50,000. Due to annual compounding, your maturity corpus would grow to approximately ₹40,68,000 — with over ₹18,18,000 in tax-free interest. Use our PPF calculator to model different contribution levels and tenures for your financial planning.