Public Provident Fund (PPF) interest rate April-June 2026: Tax-free 7.1% compounding continues

The Government has decided to keep the PPF interest rate for the first quarter of the new financial year, starting April 1, 2026, unchanged. This means you can continue to earn 7.1% tax-free compound interest on your PPF deposits in the first three months of the new financial year.

There has been no change in the PPF interest rate since April 1, 2020. Before this date, the popular small savings scheme offered 7.9% interest between July 1, 2019 and March 31, 2020. It also offered 8% interest between October 1, 2018 and June 30, 2019.

Who can open a PPF account?

As per the Public Provident Fund Scheme, 2019, the following persons are allowed to open a PPF account:

• a single adult by a resident Indian.

• a guardian on behalf of a minor/person of unsound mind. ​

An individual can have only one PPF account in his/her name across the country, either in the Post Office or any bank.

What does PPF offer?

A PPF account allows an individual to deposit up to ₹1.5 lakh per person per year and claim tax deduction under Section 80C (Section 123 under Income-tax Act, 2025). This benefit can be availed only if you are under the old tax regime.

However, the final withdrawal and the interest earned on PPF deposits are fully tax-free under both old and new tax regimes.

The amount invested in a PPF account matures after 15 years.

At a time when fixed deposit rates have declined, the public provident fund scheme offers a safe and tax-free long-term fixed-income investment option.

How is the PPF interest rate determined?

The Finance Ministry considers the recommendations of the Shyamala Gopinath Committee as a guiding principle for determining the PPF account interest rate. The PPF rate can be linked to the average secondary market yield on 10-year government securities (G-Secs) from the previous quarter, plus a spread of 25 basis points. However, the government doesn't always strictly follow this guiding principle.