The Public Provident Fund (PPF) interest rate for Q1 and Q2 of FY 2026-27 is 7.1% p.a., set by the Government of India. This rate offers stable, government-backed, and tax-free returns for long-term investors, making the SBI PPF Interest Rate 2026 a reliable savings option. Many individuals choose State Bank of India (SBI) to open their PPF accounts due to its extensive branch network and convenient online services.
| Parameter | Details |
|---|---|
| Scheme Name | Public Provident Fund (PPF) |
| Current Interest Rate (Q1 FY 2026-27) | 7.1% p.a. (as of April-June 2026) |
| Interest Rate for Q2 FY 2026-27 | 7.1% p.a. (as of July-September 2026) |
| Interest Calculation | Compounded annually, calculated monthly on the lowest balance between the 5th and last day of the month, credited on March 31st annually. |
| Minimum Annual Deposit | ₹500 |
| Maximum Annual Investment | ₹1.5 lakh (per financial year) |
| Lock-in Period | 15 years (initial duration) |
| Extension Option | In blocks of 5 years after initial 15-year maturity |
| Tax Benefits | Exempt-Exempt-Exempt (EEE) tax regime under Section 80C of the Income Tax Act, 1961 (contributions, interest, and maturity proceeds are tax-exempt). |
| Eligibility to Open Account at SBI | Indian citizens residing in the country, or individuals on behalf of a minor. NRIs can continue existing accounts opened as residents. |
| Premature Closure | Permitted after 5 years for specific reasons like medical treatment of family members or higher education of account holder, with a 1% interest rate penalty (applicable on or after December 12, 2019). |
| Loan Facility | Available from the third to the fifth financial years, with an interest rate charged at 1% more than the prevailing PPF interest rate (on or after December 12, 2019). |
| Partial Withdrawal | Allowed after the 7th financial year. If extended with contribution, maximum 60% of amount at beginning of extended period (5-year block), one withdrawal per year. |
| Account Opening Method | Through Post offices or authorized banks like SBI, including Aadhar-based biometric eKYC authentication for online opening. |
The consistent 7.1% p.a. Interest rate for PPF accounts in 2026, coupled with its EEE tax benefits, makes IT a strong choice for long-term financial planning. Investors should aim to deposit funds before the 5th of each month to maximize their monthly interest earnings.
PPF Interest Rate Calculation
The Public Provident Fund (PPF) interest rate is set quarterly by the Government of India, ensuring a uniform rate across all banks and post offices. As of Q1 and Q2 FY 2026-27, the PPF interest rate stands at 7.1% p.a. (Source: Ministry of Finance).
This rate is compounded annually, with the total interest for the financial year credited to the account on March 31st. The calculation method ensures consistent growth for long-term savings.
- Monthly Interest Calculation: PPF interest is calculated monthly based on the lowest balance in the account between the 5th day and the last day of each month. To maximise earnings, deposits should be made before the 5th of the month.
- Annual Compounding: The interest earned throughout the financial year is compounded annually. This means interest from previous years also starts earning interest, accelerating wealth growth over the 15-year lock-in period.
- Government-Backed Rate: Unlike bank fixed deposits, which have varying rates, the PPF rate is uniform across all providers, including SBI. This rate is reviewed and announced by the Ministry of Finance each quarter.
- Tax-Exempt Earnings: The interest earned on a PPF account is entirely tax-exempt under Section 10(11) of the Income Tax Act, 1961 (under the old tax regime). This makes the effective return significantly higher compared to taxable investments.
- Minimum and Maximum Deposits: Account holders must deposit a minimum of ₹500 annually to keep the account active. The maximum annual deposit limit is ₹1.5 lakh, with any excess amount not earning interest or qualifying for tax benefits.
- Loan Interest Rate: For loans taken against a PPF account, the interest rate is 1% higher than the prevailing PPF interest rate, applicable on or after December 12, 2019. This facility is available from the third to the fifth financial year.
- Premature Closure Penalty: If a PPF account is prematurely closed after five years for specific reasons (e.g., medical treatment or higher education), a 1% interest rate penalty is applied on the interest earned from the date of opening.
Understanding these calculation nuances helps account holders optimise their contributions and maximise returns from their PPF investment.
Historical PPF Interest Rates
The Public Provident Fund (PPF) interest rate is set quarterly by the Government of India, ensuring a uniform rate across all banks and post offices. As of Q1 FY 2026-27 (April-June 2026), the PPF interest rate stands at 7.1% p.a., a rate maintained consistently over recent quarters (Source: Ministry of Finance).
| Financial Year Quarter | Interest Rate (p.a.) | Source |
|---|---|---|
| Q1 FY 2026-27 (April-June 2026) | 7.1% | Government of India |
| Q2 FY 2026-27 (July-September 2026) | 7.1% | Government of India |
| Q4 FY 2025-26 (January–March 2026) | 7.1% | Ministry of Finance |
| Q3 FY 2025–26 (October-December 2025) | 7.1% | Ministry of Finance |
| Q2 FY 2025–26 (July-September 2025) | 7.1% | Ministry of Finance |
| Q1 FY 2025-26 (April-June 2025) | 7.10% | Ministry of Finance |
| Q2 FY 2019-20 (July-September 2019) | 7.9% | National Savings Institute |
| FY 2004-2005 | 8.00% | Government of India |
PPF Interest Rates Over Time
The consistent 7.1% p.a. Rate across recent quarters highlights the PPF’s stability, making IT a reliable component of long-term financial planning. This rate is calculated monthly on the lowest balance between the 5th and the last day of the month, with interest credited annually on March 31st.
Opening an SBI PPF Account
Opening a Public Provident Fund (PPF) account with SBI requires Indian citizenship and a minimum annual deposit of ₹500 to keep the account active. As of 2026, the PPF interest rate is set at 7.1% p.a. By the Government of India, offering stable, tax-free returns.
SBI, as the largest banking and financial services provider in India, helps PPF account opening for eligible individuals. The scheme offers tax benefits under Section 80C of the Income Tax Act, 1961, for contributions up to ₹1.5 lakh annually.
- Eligibility Criteria: Only Indian citizens residing in the country can open an SBI PPF account. Individuals can also open an account on behalf of a minor.
- NRI Accounts: Non-Resident Indians (NRIs) cannot open new PPF accounts. However, if an account was opened while they were a Resident Indian, they can continue to operate IT.
- Minimum Deposit: A minimum annual deposit of ₹500 is required to maintain the PPF account’s active status. Failure to do so may lead to account deactivation.
- Maximum Deposit: The maximum annual contribution to a PPF account is ₹1.5 lakh per financial year. Any amount deposited above this limit will not earn interest and is not eligible for tax rebates.
- Application Method: Accounts can be opened through SBI branches or via online banking and mobile banking services, often with Aadhar-based biometric eKYC authentication.
- Account Management: SBI account holders can set up standing instructions through netbanking for periodic contributions to their PPF accounts.
- Lock-in Period: The initial lock-in period for a PPF account is 15 years. After maturity, IT can be extended in blocks of 5 years.
- Premature Closure: Premature closure is allowed after 5 years for specific reasons like medical treatment of family members or higher education of the account holder, subject to a 1% interest rate penalty.
The SBI PPF scheme offers a secure, government-backed long-term savings option with attractive tax benefits and predictable growth for investors.
SBI PPF Scheme Benefits
The SBI PPF scheme offers a secure, government-backed long-term savings option for Indian citizens. As of Q1 2026, the Public Provident Fund (PPF) interest rate stands at 7.1% p.a., providing stable, tax-free returns. This scheme helps individuals build substantial savings through consistent contributions over time.
- Tax Benefits: Contributions up to ₹1.5 lakh per financial year are eligible for tax exemption under Section 80C of the Income Tax Act, 1961. The interest earned and maturity proceeds are also tax-exempt, falling under the Exempt-Exempt-Exempt (EEE) category.
- Government Backing: The PPF scheme is fully backed by the Government of India, making IT one of the safest investment options available. This provides investors with high security and predictable returns.
- Loan Facility: Account holders can avail a loan against their PPF balance from the third to the fifth financial year. The loan interest rate is typically 1% more than the prevailing PPF interest rate, as applicable on or after December 12, 2019.
- Partial Withdrawals: Partial withdrawals are permitted from the seventh financial year onwards. This offers liquidity while maintaining the long-term savings objective of the scheme.
- Account Extension: After the initial 15-year lock-in period, the PPF account can be extended in blocks of five years. This allows investors to continue earning tax-free interest and benefits beyond the original maturity.
- Compounding Interest: Interest is compounded annually and credited at the end of each financial year (March 31). IT is calculated monthly based on the lowest balance between the 5th day and the month-end, maximizing returns for early deposits.
- Easy Management: SBI offers digital PPF management, allowing online account opening and tracking via internet banking or mobile banking. This provides convenience for account holders to manage their investments.
These benefits make the SBI PPF scheme a strong choice for risk-averse investors seeking long-term financial growth and tax efficiency.
PPF vs SBI Fixed Deposit
The Public Provident Fund (PPF) offers a government-backed, tax-free return of 7.1% p.a. (Q1 FY 2026-27), while SBI Fixed Deposits (FDs) provide bank-backed returns ranging from 3.05% to 6.95% p.a. As of 2026. PPF has a 15-year lock-in, whereas SBI FDs offer more flexible tenures and liquidity.
| Feature | PPF | SBI Fixed Deposit |
|---|---|---|
| Government Backing | Government-backed, low risk | Bank-backed, carries bank-specific risk |
| Interest Rate | 7.1% p.a. (Q1 FY 2026-27, uniform across all banks) | 3.05% to 6.40% p.a. For general public; 3.55% to 6.95% p.a. For senior citizens (as of 2026) |
| Tax Benefits | EEE (Exempt, Exempt, Exempt) tax status: investment, interest, and maturity proceeds are all tax-free under Section 80C | Tax benefits can be availed (e.g., Tax-saver FD under 80C), but interest is taxable as per investor’s income tax slab |
| Lock-in Period | 15 years (extendable in 5-year blocks) | Flexible tenure options, generally shorter than PPF |
| Liquidity | Limited liquidity, partial withdrawals allowed after 5 years from account opening | High liquidity, funds can be withdrawn before maturity with a small penalty |
| Maximum Investment | ₹1.5 lakh per financial year | No specific maximum mentioned, depends on the investor’s choice |
| Premature Closure Penalty | 1% interest rate penalty after 5 years for specific reasons (medical, education) | Penalty typically applies for early withdrawal, varies by bank and tenure |
| Loan Facility | Available from the 3rd to 5th financial year (1% above PPF rate) | Loan against FD available, interest rate typically 1-2% above FD rate |
| Compounding Frequency | Annually, interest calculated monthly on the lowest balance between the 5th and month-end | Quarterly or half-yearly, depending on the FD type and bank terms |
| Eligibility | Indian citizens residing in India, or on behalf of a minor | Indian citizens, including minors (through guardian), NRIs, HUFs, and companies |
| Deposit Frequency | Minimum ₹500 per annum, maximum 12 deposits per financial year | Single lump-sum deposit at the time of opening |
| Risk Profile | Government-backed, virtually no risk | Bank-backed, subject to bank’s financial health (covered by DICGC up to ₹5 lakh) |
While PPF offers superior tax benefits and government backing, SBI Fixed Deposits provide greater flexibility in tenure and liquidity, making them suitable for different financial goals. You can compare lowest home loan interest rates in India to see how other investment options perform.
PPF vs Other Schemes
The Public Provident Fund (PPF) offers a stable, government-backed investment with tax benefits, making IT distinct from other savings schemes. As of Q1 FY 2026-27, the PPF interest rate is 7.1% p.a., which is generally higher than many bank Fixed Deposit rates (Source: Ministry of Finance).
Comparing PPF with other popular government-backed schemes reveals differences in interest rates, tax treatment, and lock-in periods. These factors help investors choose the most suitable option for their financial goals.
| Scheme | Interest Rate (2026) | Tax Benefit | Lock-in Period |
|---|---|---|---|
| Public Provident Fund (PPF) | 7.1% p.a. (Q1 FY 2026-27) | EEE (Exempt-Exempt-Exempt) under Section 80C | 15 years |
| Senior Citizen Savings Scheme (SCSS) | 8.2% p.a. (April-June 2026 quarter) | Eligible for deductions up to ₹1.5 lakh under Section 80C | 5 years (extendable by 3 years) |
| Sukanya Samriddhi Yojana (SSY) | 8.2% p.a. (April-June 2026 quarter) | Eligible for deductions up to ₹1.5 lakh under Section 80C | Until girl child turns 21 or marries after 18 |
| National Savings Certificate (NSC) | 7.7% p.a. (April-June 2026 quarter) | Eligible for deductions up to ₹1.5 lakh under Section 80C | 5 years |
| Kisan Vikas Patra (KVP) | Not specified (April-June 2026 quarter) | Not specified | Not specified (typically 124 months to double investment) |
| Post Office Time Deposit (3-year) | 7.1% p.a. (April-June 2026 quarter) | Eligible for deductions up to ₹1.5 lakh under Section 80C (for 5-year TD) | 3 years |
| SBI Fixed Deposit (General Public) | 3.05% to 6.40% p.a. (as of 2026) | Taxable (TDS applicable) | 7 days to 10 years |
| SBI Fixed Deposit (Senior Citizens) | 3.55% to 6.95% p.a. (as of 2026) | Taxable (TDS applicable) | 7 days to 10 years |
Interest Rates of Various Savings Schemes (2026)
While PPF offers tax-free returns and government backing, schemes like SCSS and SSY currently provide higher interest rates for specific demographic groups. Investors should consider their eligibility and financial goals when comparing these options, especially for long-term savings.
SBI PPF Account Rules
Opening an SBI PPF account requires Indian citizenship, with accounts also permissible for minors under guardianship. As of 2026, the Public Provident Fund (Amendment) Scheme, 2016, governs these accounts, ensuring a government-backed long-term savings option.
NRIs cannot open new PPF accounts but can continue existing ones opened while they were residents. The scheme offers tax benefits under Section 80C of the Income Tax Act, 1961, for contributions up to ₹1.5 lakh annually.
- Minimum Deposit: Account holders must deposit a minimum of ₹500 per financial year to keep the PPF account active.
- Maximum Deposit: The maximum annual contribution is capped at ₹1.5 lakh per financial year. Any amount exceeding this limit will not earn interest and is not eligible for tax benefits.
- Account Duration: A PPF account has an initial lock-in period of 15 years from the date of opening.
- Extension Facility: After maturity, the account can be extended in blocks of 5 years. This extension can be done with or without further contributions.
- Loan Facility: A loan against the PPF balance is available from the third to the fifth financial year. The interest rate on such loans is 1% more than the prevailing PPF interest rate (as of December 12, 2019).
- Partial Withdrawal: Partial withdrawals are permitted after the 7th financial year. If the account is extended with contributions, a maximum of 60% of the balance at the beginning of the extended period can be withdrawn once per year.
- Premature Closure: Premature closure is allowed after 5 years for specific reasons like medical treatment of family members or higher education of the account holder. A 1% interest rate penalty applies to the interest earned from the date of opening or extension.
- Interest Calculation: Interest is calculated monthly on the lowest balance between the 5th day and the end of the month, and credited annually on March 31st.
Key Takeaways
- The PPF interest rate is uniformly set by the Government of India, currently at 7.1% p.a. For Q1 FY 2026-27.
- SBI PPF accounts offer tax-free returns on contributions up to ₹1.5 lakh annually under Section 80C.
- The scheme features a 15-year lock-in, extendable in 5-year blocks, with loan and withdrawal facilities under specific conditions.
Ensure you meet the eligibility criteria and understand the deposit limits before opening an SBI PPF account.
Frequently Asked Questions (FAQs)
What is the current SBI PPF interest rate in 2026?
As of Q2 FY 2026-27, the Public Provident Fund (PPF) interest rate is 7.1% per annum. This rate is set by the Government of India and applies uniformly across all banks, including SBI. The interest is compounded annually and credited at the end of each financial year.
What is the full form of PPF?
PPF stands for Public Provident Fund. IT is a long-term savings scheme in India, backed by the Government of India, designed to help individuals build a substantial corpus over time. The scheme offers tax benefits under Section 80C of the Income Tax Act, 1961.
How long is the PPF lock-in period?
The Public Provident Fund (PPF) has a mandatory lock-in period of 15 years from the date of account opening. After this period, you can withdraw the entire maturity amount or extend the account in blocks of five years. Partial withdrawals are permitted after five financial years, subject to specific conditions.
What are the tax benefits of an SBI PPF account?
An SBI PPF account offers tax benefits under the Exempt-Exempt-Exempt (EEE) regime, as per the Income Tax Act, 1961. This means your annual contributions (up to ₹1.5 lakh), the interest earned, and the maturity proceeds are all exempt from income tax. This makes PPF one of India’s most tax-efficient investment options.
Who is eligible to open a PPF account at SBI?
Any Indian citizen residing in the country can open a PPF account at SBI, either for themselves or on behalf of a minor. Non-Resident Indians (NRIs) cannot open new PPF accounts, but existing accounts opened as a resident Indian can continue until maturity. Joint accounts are not permitted for PPF.
What is the minimum and maximum deposit for an SBI PPF account?
You must deposit a minimum of ₹500 per financial year to keep your SBI PPF account active. The maximum annual deposit allowed across all PPF accounts held by an individual is ₹1.5 lakh. Deposits can be made in a lump sum or in up to 12 installments during the financial year.
How is PPF interest calculated?
PPF interest is calculated monthly on the lowest balance between the 5th and the last day of the month, but IT is compounded and credited annually on March 31st. For example, if you deposit ₹1.5 lakh on April 4, 2026, you will earn interest for the entire month. If you deposit after April 5, the interest for April will be based on the previous month’s balance.
