Despite the economic indicators (such as low inflation and falling bond yields) that triggered rumors of a potential rate cut, the Ministry of Finance officially announced on December 31, 2025, that interest rates for the Public Provident Fund (PPF) will remain unchanged at 7.1% for the January–March 2026 quarter.
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This marks the seventh consecutive quarter where the government has maintained the status quo, choosing to prioritize the savings of middle-class investors and retirees over the mathematical formula suggested by market trends.
1. The Decision: Data vs. Policy
While the formula based on the Shyamala Gopinath Committee recommendations suggested a lower rate, the government exercised its discretion to keep the rate steady.
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| Factor | Current Data (Q4 FY 2025-26) | Impact on PPF |
| G-Sec Yield (3-Month Avg) | ~6.54% | Suggests a rate of ~6.79% |
| Retail Inflation (Nov 2025) | 0.71% | High real returns (~6.4%) |
| Actual PPF Rate | 7.10% | Status Quo Maintained |
2. 2026 Key Rules & Benefits
The PPF remains one of the most powerful tax-saving instruments in India under the EEE (Exempt-Exempt-Exempt) regime.
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Investment Limits: Minimum of ₹500 and a maximum of ₹1.5 Lakh per financial year.
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Tax Benefit: Contributions are tax-deductible under Section 80C (Old Regime).
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Compounding: Interest is calculated monthly (based on the balance between the 5th and the last day) but credited annually on March 31.
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Withdrawals: Partial withdrawals are typically allowed after 5 years, while the account matures after 15 years.
3. Small Savings Rates (Jan–Mar 2026)
The government kept rates steady across most small savings schemes to provide stability in the new year…
| Scheme | Interest Rate (Jan–Mar 2026) |
| Senior Citizen Savings Scheme (SCSS) | 8.2% |
| Sukanya Samriddhi Yojana (SSY) | 8.2% |
| National Savings Certificate (NSC) | 7.7% |
| Kisan Vikas Patra (KVP) | 7.5% (Doubles in 115 months) |
| Post Office Monthly Income (MIS) | 7.4% |
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