The PPF (Public Provident Fund) account is really the best savings account for an employee. Every employee gets this account which is very safe and a long-term investment. PPF also offers many tax benefits. Therefore, when an employee retires, he has enough money in his account to lead a peaceful life.

You also get an interest on the amount that is kept in the PPF account. The interest rates are determined by the government entities and are subjected to change. In this article, the latest PPF interest rates for 2017-18 and its calculation. Also, this being a PPF account, no tax will be applied to the interest earned. The deposits that are made in the PPF account are also eligible to be claimed as tax deductions. In addition, the maturity amount is also exempted from any form of tax. All these features make it one of the best investment option in India.


The Current Interest Rate for PPF in 2017-18

The current interest rate that is offered for PPF accounts in the first quarter of the 2017-2018 financial year is 7.9%. The previous year, it was 8.0% which means that there is a 0.1% decrease in the interest rate.

How is PPF Interest Calculated (FAQs)

  • The interest is compounded yearly for PPF accounts. And as I mentioned earlier, there is no tax on this interest. Add to this the fact that this is a long-term investment of more than 15 years. Therefore, the corpus saving will be huge at the end.
  • A minimum of Rs 500 should be deposited in your PPF account each year. Maximum deposit allowed is of Rs 1,50,000 in one year.
  • You will have the freedom of deciding of how much amount you will be needing after you retire and start saving accordingly.
  • After you’ve completed 7 years or more, you are allowed to make partial withdrawals. But there are conditions for these withdrawals.
  • In between the 3rd to 6th year, you are allowed to take loans against your balance in the PPF account.

Now I’ll show you how the PPF interest and the final maturity amount is calculated. This will also determine the amount that you can withdraw or the loan you can get against this account.

You May Also Like: PPF Withdrawal Rules (Partial & Complete) Before And After Maturity

PPF Interest Rate

  • The PPF account interest rate is decided and updated by the central government in every quarter.
  • PPF account interest is compounded yearly.
  • The Interest Rates for PPF accounts is exactly the same for all the banks and post offices across India.

Interest Rate Calculation on the maximum amount of Rs 1.5 lac that can be deposited yearly is as below:

When you invest Rs 1.5 lac every year, then the maturity amount after 15 years will be Rs 44,37,132. And this is how it will be calculated:


Year Opening Balance Amount Deposited Interest Earned Closing Balance Loan (Max.) Withdrawal (Max.)
1 0 150000 12150 162150 0 0
2 162150 150000 25284 337434 0 0
3 337434 150000 39482 526916 40538 0
4 526916 150000 54830 731746 84359 0
5 731746 150000 71421 953167 131729 0
6 953167 150000 89357 1192524 182937 0
7 1192524 150000 108744 1451268 0 263458
8 1451268 150000 129703 1730971 0 365873
9 1730971 150000 152359 2033330 0 476584
10 2033330 150000 176850 2360180 0 596262
11 2360180 150000 203325 2713505 0 725634
12 2713505 150000 231944 3095449 0 865486
13 3095449 150000 262881 3508330 0 1016665
14 3508330 150000 296325 3954655 0 1180090
15 3954655 150000 332477 4437132 0 1356753

The Current PPF Interest Rate are as follows for the banks:

SBI Bank PPF Interest Rate 7.9%
HDFC Bank PPF Interest Rate 7.9%
ICICI Bank PPF Interest Rate 7.9%
Axis Bank PPF Interest Rate 7.9%

The list of banks in which you can open a PPF account is given below:

Public Sector Banks:

  1. State Bank of India
  2. State Bank of Travancore
  3. Dena Bank
  4. State Bank of Hyderabad
  5. State Bank of Bikaner and Jaipur
  6. Allahabad Bank
  7. State Bank of Patiala
  8. Bank of Baroda
  9. Canara Bank
  10. Bank of India
  11. Bank of Maharashtra
  12. State Bank of Mysore
  13. Central Bank of India
  14. Corporation Bank
  15. IDBI Bank
  16. Indian Overseas Bank
  17. Oriental Bank of Commerce
  18. Punjab National Bank
  19. Union Bank of India
  20. United Bank of India
  21. Andhra Bank
  22. Vijaya Bank
  23. Punjab and Sind Bank
  24. UCO Bank

Private Sector Banks:

  1. ICICI Bank
  2. Axis Bank
  3. HDFC Bank

Remember that not all the branches of these banks are authorized to open PPF account. Go to the nearest branch of the bank in which you want to open your PPF account. The branch people will give you information about the branch that is authorized to open this account. You can also call on their customer care number or check their official website for this information.

If you have any queries or suggestions, please leave a comment below.

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