PPF Interest Rate Unchanged at 7.1% for April–June 2025; Continues to Offer Safe, Tax-Free Returns

New Delhi, April 7, 2025: The Government of India has announced that the interest rate on the Public Provident Fund (PPF) will remain steady at 7.1% for the April–June 2025 quarter. The rate is reviewed every three months by the Ministry of Finance and continues to offer a secure option for investors looking for stable, tax-free returns backed by the government.

What Is the Public Provident Fund (PPF)?

The PPF is one of the most popular long-term savings schemes in India, offering guaranteed returns and multiple tax benefits. It has a mandatory lock-in period of 15 years and falls under the Exempt-Exempt-Exempt (EEE) category—meaning that the amount invested, interest earned, and maturity proceeds are all exempt from income tax.

Key Features of the PPF Scheme:

• Eligibility: Only resident Indian individuals are allowed to open a PPF account. Each individual can maintain only one account.
• Investment Limits: A minimum deposit of ₹500 per financial year is required to keep the account active, while the maximum limit is ₹1.5 lakh annually.
• Interest Calculation: Interest is calculated on the lowest balance between the 5th and the last day of each month but is credited to the account annually.
• Account Revival: If an account becomes inactive, it can be reactivated by depositing the minimum amount along with a penalty of ₹50 for every defaulted year.

How to Maximize Returns:

Financial advisors suggest making deposits before the 5th of each month or ideally, a lump-sum investment by April 5. Doing so ensures that the amount earns interest for the entire month, thereby maximizing returns over the long term.

Withdrawal and Extension Options:

At the end of the 15-year term, investors can choose to extend their PPF account in blocks of five years, either with fresh contributions or without any new deposits. In both cases, the account continues to earn interest on the accumulated balance.

Partial withdrawals are allowed from the seventh financial year onwards. The maximum withdrawal permitted is either 50% of the balance at the end of the fourth financial year or the balance at the end of the previous year—whichever is lower. These withdrawals are tax-free and can be used for essential needs such as medical treatment or education.

Tax Benefits:

Under Section 80C of the Income Tax Act, 1961, investments in the PPF qualify for tax deductions up to ₹1.5 lakh annually. Additionally, the interest earned and the maturity amount are fully exempt from tax. Even partial withdrawals during the account tenure do not attract any tax.

A Popular Choice for Long-Term Savings:

Thanks to its government backing, consistent interest rate, and comprehensive tax benefits, the PPF continues to be a preferred savings tool for conservative investors focused on long-term financial goals like retirement, children’s education, or building a financial safety net.