The Public Provident Fund (PPF) remains one of India’s most trusted long-term investment options for salaried individuals. Thousands of Indian teachers search every year for PPF rules for withdrawal because they want safety without locking their money for 15 years. If you’re a school teacher or working professional looking for a safe, tax-free way to grow your savings, PPF is probably already on your radar.
This conversational guide walks you through everything you need to know about PPF in 2026 — what it is, how to open an account, the latest investment limits, PPF rules for withdrawal, loan options, and maturity rules. You’ll also learn how to use PPF for real-life needs like education, medical expenses, and retirement planning, without breaking your long-term compounding. If you’re just starting out, this checklist on Investing in PPF: 8 Smart Things to Know Before You Start will help you avoid common beginner mistakes before you commit your money.
By the end, you’ll clearly know how PPF fits into your long-term financial plan — and how to use it smartly instead of just locking money blindly.
If you’re building a complete safety-first portfolio, also read:
- Best Safe Investment Options for Teachers in India ( Complete Guide)
- PPF Interest: How to Maximize Your Returns Effectively — a teacher-friendly breakdown of how timing your deposits boosts returns.
Let’s dive in — in simple terms, with real examples from everyday teacher life. (All data and rules are updated for 2026, including the current interest rate and withdrawal provisions.)
What Is PPF and How Do PPF Rules for Withdrawal Make It Flexible?
The Public Provident Fund (PPF) is a government-backed savings scheme designed for long-term, low-risk investment. It offers a 15-year lock-in period and pays a fixed interest rate, compounded annually. For teachers and working professionals who prefer safety over speculation, PPF is a time-tested favourite — your money is 100% secure, backed by the Government of India, and it grows steadily year after year with guaranteed returns.
As of January 2026, the current PPF interest rate is 7.1% per annum, reviewed quarterly by the government (and unchanged for several years now). One of the biggest reasons for PPF’s enduring popularity is its triple tax-exempt (EEE) status — meaning your investment, interest, and maturity are all tax-free:
- Tax-free investment: You can claim up to ₹1.5 lakh each year under Section 80C of the Income Tax Act.
- Tax-free interest: The interest earned on PPF isn’t taxed annually, unlike a regular bank FD.
- Tax-free maturity: On completion of 15 years, the full amount — principal + interest — is completely tax-free in your hands.
Beyond safety and tax benefits, PPF rules for withdrawal add an element of flexibility. You can take partial withdrawals or loans after certain years, making it useful for real-life needs such as your child’s education, medical emergencies, or home repairs — without breaking your long-term savings discipline. In short, PPF offers steady, tax-free, and flexible growth without the ups and downs of the stock market. It’s perfect for building a retirement nest egg or funding your child’s future education, all while sleeping peacefully at night knowing your savings are safe. (and when combined with market-linked retirement options like the National Pension Scheme interest rates, it helps teachers build a balanced long-term portfolio).
Example: If you invest the maximum ₹1.5 lakh every year at the current 7.1% rate, you’d accumulate roughly ₹40.6 lakh in 15 years — fully tax-free. Even smaller, consistent savings matter: investing ₹50,000 per year (around ₹4,167 a month) can grow to about ₹13.5 lakh in 15 years. That’s the power of compounding quietly working for you.
How to Open a PPF Account in 2026 and Understand Key PPF Rules for Withdrawal
Opening a PPF account in 2026 is quick and hassle-free — both online and offline.
Online (Most Convenient Way) If you already have a savings account with SBI, HDFC, ICICI, Axis, or similar banks, you can open your PPF account in minutes. Just log in to internet or mobile banking → select “Open PPF Account” → fill details → verify with OTP. Your account number is generated instantly. Ensure your Aadhaar and PAN are KYC-verified — mid-2025 also introduced Aadhaar-based biometric e-KYC, making it fully paperless.
Offline (Bank or Post Office) Visit your bank or nearest Post Office and fill Form A. Submit PAN, Aadhaar, address proof, photo, and a minimum ₹500 deposit. You’ll get a PPF passbook (digital or physical) showing all transactions. Nominate a beneficiary during or after opening — it’s important for future safety.
Once your PPF is linked to your savings account, you can make deposits, transfers, or partial withdrawals online anytime. No opening charges — just maintain at least ₹500 a year to keep it active.
If you’re planning withdrawals in the future, it’s also important to understand is PPF withdrawal taxable from 2026 so there are no surprises when you access your money.
Minimum and Maximum Investment Limits in 2026
To keep your PPF account active, you need to invest at least ₹500 a year — that’s all it takes. The maximum you can invest is ₹1.5 lakh per financial year, unchanged since 2014. Budget 2025 hasn’t raised it.
You can deposit this:
- In one go (lump sum), or
- In up to 12 installments (monthly, quarterly, or flexibly).
If you prefer monthly savings, that’s ₹12,500 per month.
Tip: The ₹1.5 lakh cap applies per person, per year. Anything above this won’t earn interest — banks will refund the extra.
Also, this limit aligns with Section 80C, so investing the full ₹1.5 lakh can help you maximize your tax deduction (under the old tax regime). If you skip a year, your account becomes inactive. To reactivate, deposit ₹500 for each missed year + ₹50 penalty per year. So, even if funds are tight, keep it active with a small ₹500 contribution — it keeps your long-term savings habit alive.
Tax Benefits under Section 80C and Tax-Free Returns
One of the biggest reasons teachers and professionals love PPF is its triple tax benefit — Exempt-Exempt-Exempt (EEE) status.
Tax Deduction (Section 80C)
You can claim up to ₹1.5 lakh per year under Section 80C for your PPF investment (old tax regime).
Example: Invest ₹50,000 → taxable income reduces by ₹50,000.
If you invest the full ₹1.5 lakh, you maximize your 80C limit.
(Note: 80C benefits don’t apply under the new tax regime.)
Tax-Free Interest
The annual interest earned on your PPF balance (currently 7.1%) is completely tax-free — unlike bank FDs, where interest is taxable. Over 15 years, this tax-free compounding makes a big difference to your final corpus.
Tax-Free Maturity & Withdrawals
When your PPF matures, the entire amount — principal + interest — is 100% tax-free. You can also make partial withdrawals for needs like education or medical expenses without losing tax benefits and if you ever wonder how this works in practice, this detailed guide on Is PPF Withdrawal Taxable from 2026? explains exactly what teachers should know.
Compared to a tax-saver FD, PPF gives similar returns but no tax cuts on interest — making your effective return higher. Plus, PPF is government-backed and risk-free, ensuring steady, worry-free growth — ideal for long-term planners and teachers alike.
Lock-in Period and Flexibility
The Public Provident Fund (PPF) has a 15-year lock-in, counted from the end of the financial year in which you open the account. So, if you open it in January 2026, it officially matures in October 2041 — a little over 15 calendar years.
At first, 15 years may sound long, but this is what makes PPF powerful — it builds financial discipline and ensures steady, long-term compounding.
Flexibility within Lock-In
- You can’t withdraw the full balance early, but you can:
- Take a loan against your PPF (after 3 years), or
- Make partial withdrawals (after 5 years).
These act as safety valves during medical or family needs.
Freedom to Contribute
No fixed monthly deposits are required. Invest anytime during the year — ₹10,000 one month, ₹0 the next — as long as you put in ₹500 annually to keep the account active.
Missed a year? Reactivate easily with a ₹50 penalty + ₹500 deposit per lapsed year.
Portable & Independent
Unlike EPF, PPF is not tied to your job or employer. You can keep contributing even if you change jobs, take a break, or start your own venture. In short, the 15-year lock-in isn’t a limitation — it’s a discipline plan in disguise. For teachers and professionals, this slow-and-steady saving habit often becomes the silent foundation of long-term wealth.
Maturity Rules: 15-Year Term and Extension Options
Your PPF account matures after 15 years, counted from the end of the financial year in which it was opened. Once it matures, you get three smart choices depending on your needs:
- At maturity, you can withdraw your entire balance — contributions + interest — 100% tax-free. Many teachers and professionals time this with key life goals like retirement, children’s education, or home purchase. This is the simplest route if you need funds immediately.
2. If you don’t need the money yet, you can extend your PPF in 5-year blocks, indefinitely. Just submit Form H within 1 year of maturity.
- Continue investing up to ₹1.5 lakh/year and keep earning tax-free interest.
- Make 1 withdrawal per year, up to 60% of your balance at the time of extension.
Ideal for those who want continued growth + partial access.
3. Do nothing, and your account automatically continues (no new deposits). Your existing corpus still earns interest every year, and you can withdraw once per year — without any cap. Perfect for retirees or anyone who wants a steady, safe, interest-earning pool of money.
Key Takeaway
You don’t have to close your PPF after 15 years. You can keep extending it as long as you wish — 20, 25, or even 30 years — letting your savings compound tax-free for decades.
The 5-year extension blocks simply give you the flexibility to decide — whether to continue or cash out — at every stage of life.
Rules for Partial Withdrawal :How and When You Can Access Your Money
Life is unpredictable — and while PPF is designed for long-term savings, the PPF rules for withdrawal allow partial access after a few years without losing tax benefits. You can make your first withdrawal after 5 full financial years from account opening — i.e. from the 6th year onward.
(Example: If you opened your account in 2020, you can withdraw from 2025.)
Under the official PPF rules for withdrawal, you can withdraw up to 50% of your balance, based on the lower of:
- The balance at the end of the 4th year before withdrawal, or
- The balance at the end of the previous year.
Example: Balance ₹5 L (4th year) and ₹6 L (last year) → eligible withdrawal = ₹2.5 L.
Only one withdrawal per financial year is allowed — but it’s 100% tax-free and penalty-free. Withdrawals just reduce your compounding base, so use them only when necessary. To proceed, submit Form C at your bank or post office, or use the online option (available at most banks by 2025). Funds are credited directly to your linked account as per the latest PPF withdrawal rules.
You can also close your PPF after 5 years only in special cases such as:
- Serious illness (self or dependent), or
- Higher education (self or dependent).
A 1% interest penalty applies on the entire tenure — so treat this as a last resort.
Tip: The PPF rules for withdrawal offer a smart middle path — ideal for mid-term needs like education, medical care, or family milestones — while the rest of your savings keep compounding tax-free and secure.
PPF Loan Facility: Eligibility, Interest, and Repayment
Life doesn’t always wait 15 years — that’s why the government allows flexible access through PPF loan rules and PPF rules for withdrawal. These options help you use your money when needed, without breaking your account or losing tax benefits.
As per PPF loan rules, you can borrow from your account between the 3rd and 6th financial year. (Example: If you opened your PPF in FY 2020–21, you can take a loan any time between April 2022 and March 2026.)After the 6th year, you shift to PPF rules for withdrawal, which allow partial withdrawals instead of loans. You can get up to 25% of your PPF balance at the end of the 2nd year before the loan year. (Example: If your balance was ₹1 lakh, you can take up to ₹25,000.)
The PPF loan interest rate is just 1% above the prevailing PPF interest rate (currently 8.1% if PPF is 7.1%).
- Repay within 36 months — first the principal, then the interest (in up to two installments).
- If not repaid in time, the rate rises to 6% above PPF rate, and the unpaid balance is adjusted from your PPF savings.
Other Key PPF Rules for Withdrawal & Loan Use
- No collateral or security is needed — your PPF balance is the guarantee.
- The borrowed amount stops earning interest until repaid.
- Repaying early helps restore full compounding benefits.
Tip: Use PPF loan rules for short-term cash flow needs and rely on PPF rules for withdrawal for mid-term goals like education or medical needs. Both options let you stay invested while accessing funds safely and tax-free.
Limitations of PPF
The Public Provident Fund (PPF) is one of India’s safest, tax-free savings schemes — but it’s not perfect. Understanding its Limitations and PPF rules for withdrawal helps you plan better and avoid surprises later.
- The biggest drawback under PPF rules for withdrawal is the 15-year lock-in. You can only withdraw partially after 5 years or take a short-term loan, but full access comes only at maturity. So, if you need large funds in 7–10 years — for a house or higher education — PPF may not be ideal for that goal.
- PPF allows a maximum of ₹1.5 lakh per year, which restricts how much you can park even if you want to invest more for safety and tax-free growth.
- The current PPF interest rate (7.1% in 2025) offers safety but not high growth. Over long periods, inflation may erode your real returns. Even though PPF rules for withdrawal protect your funds from taxes, they can’t shield you from inflation risk.
- Money locked in PPF can’t be reallocated to faster-growing assets like equity or real estate. You trade flexibility for security.
- The rate is revised quarterly, not fixed for 15 years. Future contributions might earn less if rates fall — adding a touch of uncertainty.
- Interest is credited annually (March 31) — not monthly or quarterly. PPF is a pure accumulation plan, not a regular-income source.
- Under the new tax regime, Section 80C deductions don’t apply. Your investment still grows tax-free, but the upfront tax break is gone.
The PPF rules ensure discipline and safety, but they also limit flexibility. Use PPF as the stable, low-risk pillar of your portfolio — and balance it with other investments that offer liquidity and higher long-term growth.
What Happens at Maturity?
Fast forward 15 years — your Public Provident Fund (PPF) matures, and you now have a healthy, tax-free corpus waiting for you. What next? As per the PPF rules for withdrawal, you have three clear options depending on your needs.
- You can withdraw the entire balance tax-free and close the account. After closure, if you wish to continue investing, you’ll need to open a new PPF account and start a fresh 15-year cycle. Many people use their maturity amount for goals like children’s education, home purchase, or retirement planning. Plan ahead how to reinvest this lump sum — perhaps in mutual funds, tax-free bonds, or senior citizen schemes — so your money keeps working for you. Many teachers at this stage compare PPF with pension-style options — this detailed guide on PPF vs NPS: Which Is Better for Long-Term Retirement Savings for Teachers? helps you decide where your maturity corpus should go next.
- If you don’t need the money right away, you can extend your account in 5-year blocks under the PPF rules for withdrawal. Submit Form H within one year of maturity to continue contributing (up to ₹1.5 lakh per year).During the extension, you can make one withdrawal per year (up to 60% of the opening balance for that block). You can keep extending indefinitely — many investors use this to enjoy safe, tax-free growth even beyond 15 years.
- If you take no action at maturity, your PPF automatically continues in 5-year blocks without fresh deposits. Your balance still earns interest, and you can withdraw once per financial year with no limit on the amount. This is ideal if you want the corpus to keep compounding safely while you decide how to use it later.
- Once you withdraw, you’re free to reinvest the corpus as you wish. Under the PPF rules for withdrawal, there’s no restriction — you can open a new PPF, invest in ELSS, tax-free bonds, or park funds in fixed deposits or senior citizen schemes for regular income.
Bottom Line
You don’t have to close your PPF immediately at maturity. The PPF rules for withdrawal give you full flexibility — withdraw, extend, or let it continue automatically. Whatever you choose, your savings keep earning safe, tax-free interest — making PPF one of the most reliable long-term tools for teachers and professionals alike.
We hope this comprehensive guide has answered your questions and given you clarity on investing in PPF as a teacher or professional in 2025. Happy saving, and may your PPF journey be prosperous and rewarding!
Disclaimer: This article is for educational purposes only. It is not financial advice. Please consult your financial advisor or refer to official government notifications before making any investment decisions related to PPF or other savings schemes.
PPF Rules Explained: Withdrawal, Loan & Maturity FAQs (2026 Guide)
What is PPF (Public Provident Fund)?
The Public Provident Fund (PPF) is a government-backed savings scheme designed to help individuals build long-term, risk-free wealth. It offers a 15-year lock-in period, guaranteed interest (currently 7.1% p.a.), and triple tax-exempt (EEE) benefits — meaning your investment, interest, and maturity amount are all 100% tax-free.
For teachers and salaried professionals, PPF acts like a safe, disciplined savings plan — perfect for long-term goals such as retirement, children’s education, or financial security, without the risks of market-linked products.
What is the Maximum PPF Limit?
As per the latest rules, the maximum PPF limit in 2026 is ₹1.5 lakh per financial year. You can invest this amount in one lump sum or in up to 12 installments. Any deposit beyond ₹1.5 lakh will not earn interest and is returned by the bank or post office.
How to open PPF account?
To understand how to open a PPF account, you can choose either the online or offline method:
- Online: Log in to your bank’s internet or mobile banking (SBI, HDFC, ICICI, Axis, etc.), select “Open PPF Account”, fill in your details, and verify with OTP. Your account number is created instantly.
- Offline: Visit your bank or post office, fill out Form A, submit Aadhaar, PAN, photo, and make a minimum deposit of ₹500.
What Are the PPF Tax Benefits?
The PPF tax benefits make it one of the most rewarding and safe investment options for teachers and salaried professionals. It enjoys triple tax exemption (EEE) status —
- Investment: Up to ₹1.5 lakh per year qualifies for deduction under Section 80C.
- Interest: The yearly interest earned is fully tax-free.
- Maturity: The total amount (principal + interest) is 100% tax-free after 15 years.
Tip: Choose the old tax regime to claim the full PPF tax benefits and invest before 5th April each year to earn maximum interest.
What Happens at PPF Maturity in 2026?
At PPF maturity — after completing 15 years from the end of the financial year of opening — you get three flexible options:
- Withdraw the entire amount tax-free.
- Extend your PPF in 5-year blocks (with or without new deposits) to keep earning tax-free interest.
- Let it continue automatically — your balance keeps growing and earning interest even without fresh deposits.
Tip: Plan your PPF maturity with key life goals like retirement, home purchase, or children’s education so your tax-free corpus serves a real purpose.
What Are the Advantages of PPF Account in 2026?
The advantages of PPF account make it one of the best long-term investment choices for salaried individuals and teachers. Key benefits include:
- Government-backed safety — your money is 100% secure.
- Attractive 7.1% annual interest, compounded yearly.
- Triple tax-free (EEE) status — no tax on investment, interest, or maturity.
- Partial withdrawals and loans allowed after a few years for emergencies.
- 15-year lock-in with 5-year extensions, perfect for retirement planning.
Tip: Combine the advantages of PPF account with consistent yearly deposits before the 5th of April to maximize compounding.
What Are the PPF Rules for Withdrawal in 2026?
The PPF rules for withdrawal allow partial access to your savings after 5 full financial years. You can withdraw up to 50% of your balance, based on the lower of the 4th-year or previous-year closing balance. Only one withdrawal per year is permitted, and it remains completely tax-free.
Tip: Use withdrawals only for genuine needs like education or medical expenses — the rest of your balance continues to grow safely and tax-free until maturity.
What Are the PPF Loan Rules?
The PPF loan rules let you borrow from your account between the 3rd and 6th financial year after opening it. You can take a loan of up to 25% of your PPF balance at the end of the 2nd year before the loan year. The interest rate is just 1% above the PPF rate, and you must repay within 36 months.
Tip: A PPF loan is ideal for short-term cash needs — it’s quick, low-cost, and doesn’t affect your tax-free savings or account status.
What Are the PPF Limitations in 2026?
The PPF limitations include a 15-year lock-in period, meaning full withdrawal isn’t allowed before maturity. The maximum investment is ₹1.5 lakh per year, and returns are fixed (7.1%), which may not beat inflation. It also offers limited liquidity and no flexibility to invest more during high-income years.
Tip: Despite these PPF limitations, it’s still an excellent low-risk, tax-free foundation for your long-term financial plan.
What Is the Locking Period of PPF Account?
The locking period of PPF is 15 years, counted from the end of the financial year in which the account is opened. During this time, full withdrawal isn’t allowed, but you can:
- Take a loan between the 3rd and 6th year, and
- Make partial withdrawals after 5 full financial years.
Tip: After the locking period of PPF, you can extend the account in 5-year blocks to continue earning safe, tax-free interest.
