The Public Provident Fund (PPF) interest rate has been maintained at 7.1% for the October to December 2026 quarter. This marks the 26th consecutive quarter that the rate has remained unchanged since it was reduced from 7.9% in April 2020. The decision was announced by the Department of Economic Affairs under the Ministry of Finance, extending the freeze on small savings interest rates for the 10th consecutive quarter.
- PPF interest rate remains at 7.1% for October-December 2026.
- The rate has been steady for 26 quarters since April 2020.
- PPF accounts mature after 15 years with annual deposits between ₹500 and ₹1.5 lakh.
- Interest is compounded annually and is tax-free under the EEE status.
- Deposits up to ₹1.5 lakh are eligible for tax deduction under Section 80C in the old tax regime.
- At 7.1%, a full annual deposit can grow to approximately ₹40.7 lakh over 15 years.
- The PPF interest rate is linked to the 10-year government security yield plus a 0.25% spread.
What is the current interest rate for the PPF scheme?
The interest rate for the Public Provident Fund remains at 7.1% per annum for the quarter from October to December 2026. This rate has been consistent for over six years, reflecting a stable return environment for PPF investors.
How long does a PPF account mature, and what are the deposit limits?
A PPF account matures after 15 years. Investors must deposit a minimum of ₹500 annually and can contribute up to ₹1.5 lakh per year. The interest earned is compounded annually, helping the investment grow steadily over time.
What tax benefits does the PPF offer?
The PPF scheme enjoys an Exempt-Exempt-Exempt (EEE) tax status. This means that the deposits, the interest earned, and the maturity proceeds are all exempt from income tax. Additionally, deposits up to ₹1.5 lakh per year qualify for a tax deduction under Section 80C, but only if the investor opts for the old tax regime.
How much can an investor expect to accumulate over 15 years?
By investing the maximum ₹1.5 lakh annually at the current 7.1% interest rate, an investor can accumulate approximately ₹40.7 lakh over 15 years. For every ₹10,000 in the account, the annual interest earned is about ₹710, which is tax-free. For someone in the 30% tax bracket, this return is equivalent to nearly 10.1% from a taxable investment.
How is the PPF interest rate determined?
The PPF interest rate is reviewed quarterly and is based on a formula recommended by the Shyamala Gopinath Committee in 2011. The rate is linked to the average yield on 10-year government securities plus a 25 basis point (0.25%) spread. For the July-September 2026 quarter, the 10-year government security yield averaged around 6.85% to 6.9%, which corresponds to the 7.1% PPF rate.
Does the quarterly interest rate apply to the entire PPF balance?
Yes, the interest rate declared for a quarter applies to the entire outstanding balance in the PPF account for that quarter. Therefore, the 7.1% rate will be applied to all funds in the account for the October to December 2026 period.
