Lesson 2 of 3 · 7 min
PPF: the account you cannot empty
Fifteen financial years, a rate the government resets every quarter, and a tax treatment almost nothing else gets. The lock is the product, not a side effect.
PPF is a savings account you are not allowed to empty. You open one at a post office or a bank, put in anything from ₹500 to ₹1,50,000 in a financial year, and it runs for fifteen full financial years before it matures.
The Government of India sets the rate every quarter and owes you the money, so there is no credit risk — nobody defaults on you. What you hand over in exchange is reach. For the first six years nothing comes out, and after that only a limited part of it does.
PPF, by the numbers
- Rate for Q1 FY 2026-27 (April-June 2026)
- 7.1% a year
- Deposit range in a financial year
- ₹500 to ₹1,50,000
- Term
- 15 financial years
- First partial withdrawal
- From year 7
Re-notified every quarter by the Ministry of Finance. It is the shortest-lived figure on this page, not a rate locked for fifteen years.
The ceiling counts across all your PPF accounts together. Miss the minimum and the account goes dormant until it is revived.
Extendable afterwards in blocks of five years, with fresh deposits or with none at all.
A capped part of an earlier year's balance, once a year. Before that, nothing comes out.
Fifteen years of a PPF account, from the inside
Year 1
You open it and deposit anything from ₹500 upward
The financial year of opening counts as year one. An account opened in March uses up a whole year in a month.
Years 1 to 6
Deposits and interest pile up, and nothing comes out
A loan against the balance becomes possible partway through, which is a different thing from a withdrawal — it has to be repaid.
Year 7 onward
One partial withdrawal a year becomes possible
Capped by a formula on an earlier year's balance, not on the whole corpus.
Year 15
The account matures and the full balance is payable
The interest picked up along the way was never taxed, and neither is the amount that comes out.
After year 15
You may extend in blocks of five years
Either carrying on with deposits, or leaving the balance to earn with none.
Fifteen years? I am nineteen.
KabirTara
Kabirasking
Fifteen years. I am nineteen. That money comes back when I am thirty-four. Why would anyone hand over cash for that long, when a deposit hands it back in one?
Taraexplaining
Because the two are answering different questions. A one-year deposit is money you are parking. PPF is money you are putting out of your own reach on purpose.
Kabirasking
Out of my own reach is a feature?
Taraexplaining
For a lot of people, yes. The account nobody can raid in a bad month is the one still standing in year fifteen. That is honestly most of what the product is.
Kabirasking
And if something genuinely goes wrong in year four?
Taraexplaining
Then it was the wrong place for that particular money. A lock is only worth having on money you can afford to lock. Anything you might need soon belongs somewhere you can reach it.
Match them up
Five words this whole shelf runs on
Pick a term, then pick what it actually means.
Pick a term on the left.
Check yourself
1 / 3
Kabir asks
How long does a PPF account run before it matures?
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