The Government of India backs the Public Provident Fund (PPF) as a long-term investment scheme. It offers a secure way to grow your savings while enjoying tax benefits. The PPF interest rate for 2025 is subject to quarterly revisions by the government and is one of the most attractive risk-free returns available in India. This article provides a comprehensive overview of PPF, including its essential features, interest rate calculations, benefits, and more.
The Government of India determines the PPF interest rate for 2025 on a quarterly basis. As of the latest update, the interest rate remains at 7.1% per annum (compounded annually). This rate is subject to change based on government policies and prevailing market conditions.
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PPF interest is calculated monthly on the lowest balance between the 5th and the last day of each month, and the bank credits it to the account at the end of the financial year. Here’s how it works:
A PPF calculator is a useful online tool to estimate the maturity amount based on the investment amount, tenure, and applicable interest rate. It helps investors plan their long-term financial goals efficiently.
PPF follows an annual compounding system, meaning interest earned is added to the principal each year. This leads to higher returns over time due to the compounding effect.
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Here’s a look at historical PPF interest rates:
| Year | PPF Interest Rate (%) |
| 2020 – 2025 | 7.1% |
| 2019 – 2020 | 7.9% – 7.1% |
| 2018 – 2019 | 7.6% – 8.0% |
| 2016 – 2017 | 8.1% – 8.0% |
| 2011 – 2016 | 8.7% – 8.8% |
| 2000 – 2011 | 8.0% – 9.5% |
Investing in PPF is suitable for individuals seeking low-risk, long-term savings with tax benefits. It is ideal for:
The Public Provident Fund (PPF) remains one of the best long-term investment options in India. With a 7.1% interest rate in 2025, it offers stable, risk-free returns while ensuring tax benefits. The scheme’s flexibility, compounding interest, and tax efficiency make it a preferred choice among investors looking for financial security. Whether you aim to secure retirement funds or save for future financial goals, PPF serves as a reliable investment avenue.
The PPF interest rate for 2025 is 7.1% per annum.
Yes, partial withdrawals are allowed from the 7th financial year.
No, PPF interest is tax-free under Section 10 of the Income Tax Act.
The Government of India revises the interest rate quarterly.
Yes, you can extend it in 5-year blocks with or without further contributions.
A penalty of ₹50 per year is charged to reactivate the account.
NRIs cannot open a new PPF account, but they can continue existing accounts until maturity.
You can invest up to ₹1.5 lakh per financial year.
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