Public Provident Fund (PPF) interest rate July-September 2026: 7.1% compounding to continue

The Government has decided to keep the PPF interest rate for the second quarter of the current financial year unchanged. Today's announcement means you can continue to earn 7.1% tax-free compound interest on your PPF deposits in the next three months of the ongoing financial year.

There has been no change in the interest rate for PPF deposits since April 1, 2020. Prior to this date, the PPF account offered 7.9% interest between July 1, 2019, and March 31, 2020. The scheme offered 8% interest between October 1, 2018, and June 30, 2019.

The interest rate for the PPF scheme is decided by the Finance Ministry based on the recommendations of the Shyamala Gopinath Committee. These recommendations serve as a guiding principle for determining small savings rates. Accordingly, PPF interest 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 Finance Ministry doesn't always strictly follow this guiding principle.

Who can invest in PPF?

The PPF account is governed by the Public Provident Fund Scheme, 2019 rules. It allows the following persons to invest in a PPF account:

• An individual resident Indian.

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

The PPF scheme doesn't allow joint accounts. Moreover, a person can have only one PPF account in his/her name across the country, either in the Post Office or any bank.

Are there tax benefits?

Yes. A PPF scheme investment up to ₹1.5 lakh per person per year. This investment can be claimed as a tax deduction under Section 80C of Income-tax Act, 1961 (Section 123 of Income-tax Act, 2025). However, this tax benefit can be availed only under the old tax regime. No deduction is allowed under the new tax regime.

Beyond deduction, the bigger tax benefit of investing under this scheme is that the interest earned and amount withdrawn on maturity are fully tax-free under both tax regimes.

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

At a time when banks are offering lower fixed deposit interest rates, PPF offers a safe and tax-free long-term fixed-income investment option.