PPF income strategy: How to get ₹61,000 monthly pension from your public provident fund investment? See calculation

PPF Income Strategy: Public Provident Fund, commonly known as PPF, is one of the most popular small savings scheme in India due to its tax benefits, interest rates and easy accessibility among others. PPF is a long-term investment scheme that gives you decent returns on the principal you invest. Backed by the Government of India itself, this small savings scheme is one of India's most trusted savings instruments.

With the right amount of discipline, you can grow a corpus of over ₹1 crore using PPF and get ₹61,000 monthly as pension from the interest, without even touching the principal.

Government announces interest rate on PPF

The government has recently announced the latest interest rates on various small savings schemes, including PPF, for the April to June quarter of FY27.

“The rates of interest on various Small Savings Schemes for the first quarter of FY 2026-27, starting from April 1, 2026, and ending on June 30, 2026, shall remain unchanged from those notified for the fourth quarter (January 1, 2026, to March 31, 2026) of FY 2025-26,” the finance ministry said in a notification.

This means that the PPF interest rates now stand at 7.1%. Notably, the government had last changed the interest rate on some small schemes, mainly operated by post offices and banks, in the fourth quarter of 2023-24 (i.e. January to March 2024).

Key PPF rules you should now

• You can invest a minimum of ₹500 and a maximum of ₹1.5 lakh in one financial year.
• The lock-in period for PPF investment is 15 years.
• After 15 years, you can extend your PPF account tenure in blocks of 5 years. This extension can be done as many times as you want.
• The current PPF interest rate is 7.1% per annum.
• During your extension time, you can either just stay invested without contribution, or keep investing to grow more corpus.
• To get an extension, you must submit Form H within one year of maturity.

How to build ₹1 crore PPF corpus?

To build a ₹1 crore PPF corpus, you need to follow strict financial discipline. Let's assume that you contribute ₹1.5 lakh to your PPF account every year. Here is how you can get ₹1 crore in this scenario —

Investment amount: ₹1.5 lakh per year

Interest rate: 7.1%

Now if you extend the investment period beyond 15 years, and assume that the interest rate stays at 7.1%, then corpus growth will be —

15 years: ₹40.68 lakh

20 years (first 5-year extension): ₹66.58 lakh

25 years (second 5-year extension): ₹1.03 crore

Therefore, to reach a ₹1 crore corpus, you have to invest ₹1.5 lakh in PPF every year for 25 years.

How to get ₹61,000 monthly pension from PPF?

Since you can extend your PPF investment tenure for an indefinite time, let's assume that you stop your PPF contributions entirely after 25 years.

However, during this period you can still earn the relevant interest rate the government decides at that time. Assuming that the PPF interest rate is still 7.1%, here's how you can get ₹61,000 pension.

Total corpus: ₹1.03 crore

Interest rate: 7.1% per annum

Annual interest earned: 7.1% of ₹1.03 crore = ₹7.32 lakh per year

Monthly income from PPF interest: ₹7.32 lakh ÷ 12 = ₹60,989 per month.

Therefore, you will be able to earn nearly ₹61,000 every month as pension, while your PPF corpus of ₹1.03 crore remains intact.

However, it must also be noted that PPF withdrawals are limited to once every financial year. Therefore, you will have to withdraw the annual interest earned each year all at once, and then divide the money on a monthly basis depending on your needs.