Public Provident Fund (PPF) interest rate for July-September 2025

Public Provident Fund account interest for the July-September quarter of FY 2025-26 has been announced by the Finance Ministry today (June 30, 2025).

Who can invest in a PPF account?

The PPF account can be opened by:

• a single adult by a resident Indian.
• a guardian on behalf of a minor/person of unsound mind. ​

However, only one account can be opened all across the country, either in the Post Office or any Bank.

The scheme allows deposits up to ₹1.5 lakh per person per year. Deposits in a PPF account mature after 15 years.

Amid falling fixed deposit rates, PPF serves as a secure, long-term investment option offering both guaranteed returns and tax benefits.

What was expected?

Ahead of the announcement of the revised interest rate, PPF account holders were keenly watching whether the rate will be reduced from its current level or remain unchanged.

Since April 1, 2020, the PPF interest rate has been steady at 7.1%. However, for the first time in five years, there is a strong possibility of a rate cut.

Before April 1, 2020, PPF offered 7.9% interest between July 1, 2019, to March 31, 2020, and 8% interest between October 1, 2018, to June 30, 2019.

You may be curious as to why there was a possibility of the PPF rate cut. Well, the answer lies in the methodology for setting PPF rates as per the recommendations of the Shyamala Gopinath Committee.

PPF interest rate is linked to the average yield on 10-year government securities (G-Secs) from the previous quarter, plus a spread of 25 basis points.

Recent data shows that the average yield on 10-year G-Secs was 6.299% between April 1 and June 29, 2025. If we apply the formula, then the new PPF rate works out to be 6.55%, which is significantly lower than the current rate of 7.1%.

However, one couldn't have been sure that the government would lower the PPF interest rate. In the past, the Finance Ministry has kept small savings rates unchanged even when market conditions suggested a cut.