What is the crucial 5th of the month rule for PPF deposits?

Under PPF scheme rules, monthly interest is calculated on the minimum balance between the close of the 5th day and the last day of each month. If you deposit after the 5th, your deposit earns zero interest for that month. To maximize returns, always deposit on or before the 5th of each month, or deposit a lump sum before 5th April for the entire financial year.

Can I extend my PPF account beyond 15 years?

Yes. Upon completion of the initial 15-year statutory tenure, you can extend your PPF account indefinitely in blocks of 5 years. You can choose to extend with fresh contributions (by submitting Form H within one year of maturity) or continue without contributions, where your existing corpus continues earning the government interest rate tax-free.

What is the EEE tax status of PPF in India?

PPF enjoys Exempt-Exempt-Exempt (EEE) status: deposits qualify for deduction under Section 80C (up to ₹1.5 Lakhs/year), annual interest credited is completely exempt from income tax under Section 10(11), and the final maturity amount is completely tax-free.

What is the maximum and minimum deposit in a PPF account per financial year?

The statutory minimum deposit is ₹500 per financial year, and the maximum ceiling is ₹1,50,000 across all PPF accounts in a single individual's name (including accounts opened on behalf of minor children). Any amount deposited in excess of ₹1.5 Lakhs earns no interest and does not qualify for tax rebate.

When can I take a loan or make partial withdrawals from my PPF account?

You can avail a loan against PPF between the 3rd and 6th financial year (up to 25% of the balance at the end of the 2nd preceding FY). Partial withdrawals are permitted starting from the 7th financial year onward (up to 50% of the balance at the end of the 4th preceding year or previous year, whichever is lower).

PPF Calculator India (7.1%): 15-Year Schedule & Extensions

Comprehensive Guide to the Public Provident Fund (PPF)

The Public Provident Fund (PPF) is one of India's most popular, sovereign-guaranteed small savings schemes. Introduced by the National Savings Institute in 1968 under the Public Provident Fund Act, PPF is designed to mobilize small savings while providing risk-averse individuals with an unbeatable combination of safety, competitive interest compounding, and complete tax immunity.

1. The Golden "5th of the Month" Rule Explained

Under statutory PPF scheme rules, interest is calculated on a monthly basis on the minimum balance standing to the credit of the subscriber between the close of the 5th day and the end of the month.

Why 5th April vs Monthly Deposits Matters:

Lump sum before April 5th: If you invest the full ₹1,50,000 on or before April 5th, your entire deposit earns interest for all 12 months (April through March). Interest earned in Year 1: ₹10,650.
Monthly installments of ₹12,500: If you deposit ₹12,500 by the 5th of each month, your interest formula compounds over an average of 6.5 months. Interest earned in Year 1: ₹5,768.75.
The Compounding Difference: That initial ₹4,881 difference compounds every single year. Over 15 years, depositing on or before 5th April earns you over ₹1.35 Lakhs in additional interest on the exact same capital!

2. Triple Tax Exemption (EEE Status)

Unlike Bank Fixed Deposits (where interest is fully taxable at your income tax slab rate) or Debt Mutual Funds (taxable under capital gains), PPF enjoys prestigious EEE (Exempt-Exempt-Exempt) tax status:

1. Investment (Exempt)

Contributions up to ₹1,50,000 per financial year qualify for tax deduction under Section 80C.

2. Accrual (Exempt)

Annual interest credited to your account on March 31st is 100% tax-free under Section 10(11).

3. Maturity (Exempt)

The final accumulated maturity corpus is paid out 100% tax-free with zero capital gains or TDS.

3. Extension Beyond 15 Years: The 5-Year Block Rule

A PPF account matures after 15 complete financial years from the end of the financial year in which it was opened. At maturity, you have three options:

Close and Withdraw: Withdraw the entire corpus tax-free to your savings account.
Extension with Contributions (Form H): Extend the account in blocks of 5 years (e.g., to 20, 25, 30, or 35 years). You must submit Form H to your bank or post office within one year of maturity. You can withdraw up to 60% of the balance at the start of each 5-year block.
Extension without Contributions: If no form is submitted within one year, the account automatically extends without contributions. The existing balance continues to compound at the prevailing government rate, and you can withdraw any amount once per financial year.

4. Loan & Partial Withdrawal Eligibility

PPF accounts provide liquidity mechanisms for emergencies before the statutory 15-year maturity:

Loan Against PPF (Years 3 to 6): Permitted from the 3rd financial year up to the end of the 6th financial year. The loan amount is capped at 25% of the balance standing to your credit at the end of the second preceding financial year. The interest rate on the loan is 1% above the prevailing PPF rate if repaid within 36 months.

Partial Withdrawal (Year 7 Onwards): Starting from the 7th financial year, one withdrawal is allowed per financial year. The maximum withdrawal limit is 50% of the balance at the end of the 4th preceding year or 50% of the balance at the end of the preceding year, whichever is lower.

5. Frequently Asked Questions (FAQ)

Any deposit exceeding ₹1,50,000 in a single financial year is considered irregular under PPF scheme rules. The excess amount earns 0% interest and does not qualify for Section 80C tax deduction. Banks will refund the excess amount without interest.

Yes, a parent or legal guardian can open a PPF account on behalf of a minor child. However, the combined annual contribution across the parent's own PPF account and the minor's account cannot exceed ₹1,50,000 per financial year for Section 80C benefits.

The Ministry of Finance reviews and declares interest rates on small savings schemes (including PPF, Senior Citizen Savings Scheme, and Sukanya Samriddhi) on a quarterly basis. The current rate is 7.1% per annum.

No. Under Section 15 of the Government Savings Banks Act, PPF balances are completely immune from attachment under any decree or order of any court in respect of any debt or liability incurred by the subscriber. Note that this protection does not apply to attachments by the Income Tax Department.

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Year-by-Year PPF Growth & Withdrawal Schedule