PPF, the rules that bind

The Public Provident Fund is the most widely held long-term savings instrument in India, and it is defined by its restrictions. This chapter is the restrictions, precisely, because every one of them has a planning consequence.

The numbers

Minimum ₹500 and maximum ₹1,50,000 in a financial year. The floor keeps the account active; the ceiling is the binding constraint for anyone who can save meaningfully. It is per financial year, not per deposit, and it is a limit on what you may put in rather than on what the account may hold.

The rate is set by the government and reset quarterly. It is not a market rate and not fixed for the life of the account. The Department of Posts circulates the Ministry of Finance's quarterly decision; for the second quarter of FY 2026-27 the rates were left unchanged from the previous quarter, as they had been for several quarters before.

That quarterly reset is the feature people most often misunderstand. A PPF is not a fifteen-year fixed rate. It is fifteen years of whatever rate the government sets along the way, which is a materially different promise — and chapter 8 shows what that has meant historically.

The clock

Account matures on completion of fifteen complete financial years from the end of the year in which the account was opened.

Read it carefully, because it is not fifteen years from opening. The count starts at the end of the financial year of opening, and then fifteen complete financial years must pass. For an account opened at any point in a financial year, the effective life is fifteen years plus the remainder of the year of opening.

The two windows

Loan: from the third financial year to the sixth. A loan against the balance, available in a window that then closes.

Withdrawal: permissible every year from the seventh financial year. This is the one that matters for planning, and it means a PPF is illiquid for roughly its first six years and partially liquid thereafter.

So the honest description is not "a fifteen-year lock-in". It is a hard lock for about six years and a constrained, partial access after that. For most household purposes that distinction is the whole decision.

After maturity, three choices

This is where PPF becomes unusually flexible, and it is under-used.

Extend with deposits, in blocks of five years, for any number of blocks. The account continues to accept contributions.

Extend without deposits — the balance "can be retained indefinitely without further deposit after maturity with the prevailing rate of interest." You stop contributing, the money keeps earning the notified rate, and you retain the withdrawal rights.

Close and take the money.

The second option deserves emphasis: an account you have stopped contributing to is not idle. It continues to earn the administered rate indefinitely, which makes a matured PPF a genuinely useful place to leave money with no further obligation.

The protection nobody mentions

The amount in the PPF account is not subject to attachment under any order or decree of a court of law.

A statutory immunity from attachment in respect of debts or liabilities of the account holder. For a self-employed person, a guarantor, or anyone carrying business risk, this is not a footnote — it is a reason to hold a PPF even where the rate is unexciting, because it is one of very few asset protections an individual gets by default.

It is also a reason the ceiling exists: an unlimited protected account would be an obvious shelter.

Working the problem

An account opened in February 2027.

February 2027 falls in financial year 2026-27, which ends 31 March 2027.

Maturity: fifteen complete financial years from the end of FY 2026-27. Those are FY 2027-28 through FY 2041-42, so the account matures at the end of FY 2041-42, on 31 March 2042.

From opening in February 2027 to maturity in March 2042 is about fifteen years and one month — the fifteen years plus the stub of the opening year.

First withdrawal: permissible from the seventh financial year, counting the financial years of the account. Taking FY 2026-27 as the first, the seventh is FY 2032-33, so withdrawal becomes available in FY 2032-33 — about five years and eleven months after opening. Because the exact counting convention is the kind of thing a bank or post office will apply from its own circulars, confirm the first permissible withdrawal year with the institution holding the account rather than relying on arithmetic alone.

What this implies about the opening month. Opening in February or March wastes almost a full financial year of the clock: the stub year counts for the maturity calculation but gives you only weeks of contribution at the start. Opening in April, at the beginning of a financial year, gives you a full year's ₹1.5 lakh of contribution capacity for the same fifteen-year wait.

The same logic applies to every year's contribution. Money deposited in April earns for the whole year; money deposited in March earns for days. Since the annual ceiling is fixed, when you contribute within the year changes your return and your limit does not — which makes contributing early in April the single cheapest optimisation available in this product.

Who it does not suit

Anyone who may need the money within six years. The lock is real.

Anyone whose ₹1.5 lakh of annual capacity is better used elsewhere — the ceiling is shared across a group of eligible investments, so the PPF competes with them for the same allowance, and the next two chapters take that up.

Anyone expecting a fixed rate. It is reset quarterly, and chapter 8 shows the direction it has moved.

The point

PPF is defined by its constraints: ₹500 to ₹1,50,000 a financial year, a rate the government resets quarterly rather than a fixed one, maturity after fifteen complete financial years counted from the end of the year of opening, loans in the third to sixth years and withdrawals from the seventh. So it is a hard lock for roughly six years rather than fifteen, it can be extended in five-year blocks or simply left to earn indefinitely without further deposits, and the balance cannot be attached by a court — a protection that is often worth more than the rate. Contributing in April rather than March costs nothing and earns a full year.