PPF Interest Rate

The subscribers of the Public Provident Fund have to pay a fixed interest rate every year on the PPF balance. The rate has been fluctuating for a few years and slightly dropped after 2016. The PPF interest rate for Financial Year 2018-2019 is 8%.
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The PPF interest rate is payable on PPF balance which is fixed every year. It has been observed in the last few years that the interest rate has been fluctuating. However, the rates were expected to drop marginally for the 2016 Union Budget. The rate was set at 8.7% in Financial Year 2015-2016. It was later slashed to 8.1% for Financial Year 2016-2017 and further slashed to 7.6% for the Financial Year 2017-2018. The current rate of interest for PPF for the Financial Year 2018-2019 is 8%. The rates of interest in the past few years have been as follows:

Time Interest Rate (p.a.)
Table 1. PPF Interest Rate From 2011 to Current
Current PPF Interest Rate 8.00%
01 April 2017 - 31st March 2018 7.60%
01 April 2016 - 31st March 2017 8.10%
01 April 2015 - 31st March 2016 8.70%
01 April 2014 - 31st March 2015 8.70%
01 April 2013 - 31st March 2014 8.70%
01 April 2012 - 31st March 2013 8.80%
01 Dec 2011 - 31 March 2012 8.60%

How is the interest on PPF calculated?

The interest on PPF is computed on the minimum balance in an individual’s account between the 5th to the final day of every month. Thus, in case the individual wishes to deposit a large amount at any time of the year, he/she should do that on or before the 5th of the particular month. This will allow the individual to earn interest on the amount for the whole month.

Advantages of PPF

Here are some of the main advantages of having a PPF Account for an Indian citizen:

  • If an individual makes a deposit of up to Rs. 1 lakh per annum in their PPF account, the sum of money is deductible under Section 80C of the Income Tax Act. The contributions made to the PPF accounts of an assessee’s spouse and/or children are also eligible for tax deduction under Section 80C.
  • The interest earned on the PPF amount is also exempted from tax. This implies that the returns earned on the investment made in PPF are completely taxfree.
  • The amount in a PPF account cannot be claimed to meet cases of debt and/or liability. The entire amount of money in a PPF account belongs to the account holder for life and is payable to the nominee(s) of the person after his/her death.

How to check the current balance of a PPF account?

An individual can check the status of his/her PPF account. This is what can be done to know the status of a PPF account:

  • The individual may contact their bank or post office branch to know the current status of their PPF account.
  • If the bank provides online banking facility, one can request the bank to link their PPF account to their respective online banking account. Once the accounts are linked, the individual can access his/her PPF account and perform the basic functions such as viewing or checking the PPF account status. He/she can also make online payments for PPF loans.

How to find out PPF Interest Rate

The current interest for a year, generally from April 1 of the year to March 31 of the next year is the same. It is available online and does not change throughout the whole year. However, the more important number which may be the current balance on the PPF account is a more important number. Here is what needs to be done to check that out:

  • The individual may contact their bank or post office branch to know the current status of their PPF account.
  • If the bank provides online banking, they can request them to link their PPF account to their existing online banking account. Once they are merged, the accounts, can be accessed and basic functions such as view, checking account status as well as the payment for PPF loans can be made online.

Note that EPF & PPF are two very different things as the EPF is meant for employees whereas PPF is a personal savings account which can be used by an individual who is self-employed or income is not acquainted through an organization or company. This savings investment can also be made by people who already own an EPF account.

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News on PPF

  • Public Provident Fund Interest Rate may take a hike

    Investors have some good news in store for them as small savings schemes and interest rates of Public Provident Fund will reportedly take a major hike. There has been a significant rise in the yields provided by bonds, hence this change has come along.

    Public Provident Fund interest rate has remained unhinged for a long time now. Even small savings schemes such as National Savings Certificate (NSC), Kisan Vikas Patra (KVP) and Senior Citizens Savings Scheme, and so on are directly in link with bond yields holding same maturities by the Indian Government.

    21 June 2018

Display of any trademarks, tradenames, logos and other subject matters of intellectual property belong to their respective intellectual property owners. Display of such IP along with the related product information does not imply BankBazaar's partnership with the owner of the Intellectual Property or issuer/manufacturer of such products.

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