The Public Provident Fund (PPF) is one of India's safest and most tax-efficient savings schemes. Backed by the Government of India, it offers guaranteed, completely tax-free returns — making it a cornerstone of smart long-term planning.
Why PPF is Special: EEE Status
PPF enjoys EEE (Exempt-Exempt-Exempt) status — the gold standard in taxation:
- Exempt 1: Your investment (up to ₹1.5 lakh/year) is deductible under Section 80C.
- Exempt 2: The interest earned is tax-free.
- Exempt 3: The maturity amount is fully tax-free.
7.1% per annum, compounded yearly and fully tax-free. A 7.1% tax-free return is equivalent to about a 10%+ taxable return for someone in the 30% slab.
Key PPF Rules
| Rule | Detail |
|---|---|
| Minimum / year | ₹500 |
| Maximum / year | ₹1,50,000 |
| Lock-in | 15 years (extendable in 5-yr blocks) |
| Interest | 7.1% p.a., compounded annually |
| Partial withdrawal | Allowed from 7th year |
| Loan | Allowed from 3rd to 6th year |
How Much Can You Build?
Investing the full ₹1.5 lakh every year for 15 years at 7.1% grows to roughly ₹40.7 lakh — entirely tax-free. Extend it to 25 years and you cross ₹1 crore, with about ₹37.5 lakh invested and the rest pure tax-free interest.
🏦 Plan your PPF corpus
Use our free PPF calculator to see your maturity amount, total interest and year-by-year growth.
Open PPF Calculator →Smart PPF Tips
- Invest before the 5th of every month — interest is calculated on the lowest balance between the 5th and month-end.
- Deposit the full year's amount in April to maximize annual interest.
- Extend after 15 years in 5-year blocks to keep earning tax-free interest.
- Open accounts for family to legally increase your tax-free savings.