PPF Interest Rate:
The Ministry of Finance has declared the Public Provident Fund (PPF) interest rate for the October–December 2025 quarter. The rate will remain unchanged at 7.1% per year, compounded annually. This means investors will continue to earn the same returns as in previous quarters.
The PPF interest rate has not changed since April 1, 2020. Before that, it was slightly higher – 7.9% between July 2019 and March 2020 and 8% from October 2018 to June 2019. Despite expectations of a possible hike, the government has chosen to keep the rate steady, just as it did for other small savings schemes.
Any resident Indian adult can open a PPF account.
Parents or guardians can open it on behalf of a minor or a person of unsound mind.
Only one PPF account is allowed per person across the country, either in a bank or post office.
Investors can deposit up to ₹1.5 lakh per year in their account. The money is locked in for 15 years, making it a long-term savings option. Partial withdrawals and account extensions are possible after maturity.
PPF is considered one of the safest investment choices in India because it is backed by the government. It offers guaranteed returns, along with tax benefits under Section 80C of the Income Tax Act. The interest earned is also tax-free, which adds to its appeal, especially when bank deposit rates are falling.
The interest rate for PPF is linked to the average yield of 10-year government securities (G-Secs) from the previous quarter. A margin of 25 basis points is added to this yield to arrive at the final rate.
For July–September 2025, the G-Sec yield was between 6.32% and 6.54%. According to the formula, the PPF rate could have been around 6.6–6.8%. However, the government often decides to keep the rate unchanged, even if market conditions suggest otherwise.
For now, savers can continue to enjoy 7.1% returns with safety and tax savings, making PPF a reliable option for long-term wealth building.
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