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PPF Interest Rate FY 2022-23

The current PPF account interest rate remains unchanged by the Ministry of Finance for the quarter April 2022 to June 2022 of the FY 2022-23 is 7.10% per annum. The public provident fund interest is calculated every month on the lowest balance at the credit of the account balance between the close of the fifth day and the last day of every month.

The interest is calculated every month but is credited to the investor’s account at the end of the year. Ideally, the investor should invest a fixed amount of sum every month before the 5th to fetch the interest for the entire month. In this way, the investor can gain maximum return on the same.

PPF Interest Rate History Till Today

YearMax Investment Amount (Rs)Interest Rate (p.a.)
1st Apr 2020 to Till Date1500007.10%
1st July 2019 to 31st March 20201500007.90%
1st Oct 2018 to 30th Jun 20191500008%
1st Jan 2018 to 30th Sept 20181500007.60%
1st July 2017 to 30th Sept 20171500007.80%
1st Apr 2017 to 30th June 20171500007.90%
1st Oct 2016 to 31st March 20171500008%
1st Apr 2016 to 30th Sept 20161500008.10%
1st Apr 2014 to 31st March 20161500008.70%
1st Apr 2013 to 31st March 20141000008.70%
1st Apr 2012 to 31st March 20131000008.80%
1st Dec 2011 to 31st March 20121000008.60%
1st Apr 2011 to 30th Nov 20111000008%
1st March 2003 to 31st March 2011700008%
1st Apr 2002 to 28th Feb 2003700009%
1st March 2002 to 31st March 2002600009%
1st March 2001 to 28th Feb 2002600009.50%
15th Jan 2000 to 28th Feb 20016000011%
1st Apr 1999 to 14th Jan 20006000012%
FY 1988 – 896000012%
FY 1987 – 884000012%
FY 1986 – 874000010%
FY 1985 – 86400009.50%
FY 1984 – 85400009%
FY 1983 – 84400008.50%
FY 1982 – 83300008.50%
FY 1981 – 82300008%
FY 1980 – 81300007.50%
FY 1979 – 80300007.50%
FY 1978 – 79200007.50%
FY 1977 – 78200007%
FY 1976 – 77200007%
FY 1975 – 76200007%
FY 1974 – 75200005.80%
FY 1973 – 74200005.30%
FY 1972 – 73200005%
FY 1971 – 72150005%
FY 1970 – 71150005%
FY 1969 – 70150004.80%
FY 1968 – 69150004.80%

What is PPF?

The Public Provident Fund scheme is a savings-cum-tax-saving instrument. It was introduced in the year 1968 by the National Savings Institute of the Ministry of Finance. The aim of this small savings scheme is to mobilize small savings among the investors.

In other words, Public Provident Fund scheme is an investment with reasonable returns combined with income tax benefits

Besides offering safety and returns, investing in a PPF scheme also offers tax benefits up to 1.5L under section 80C of the Income Tax Act.

In other words, investors can use the PPF scheme as a tool to maintain a corpus for their retirement by putting a fixed amount regularly. PPF has a lock-in period of 15 years and can be extended in a block of 5 years. Post this lock-in period of 15 years the PPF maturity amount can be withdrawn.

How is the PPF rate of interest calculated?

As per the PPF rules, PPF interest rate calculation is on a monthly basis on the PPF balance in the investor’s account but is credited only at the end of the financial year on March 31st.

In this paragraph, we will discuss the interest rate calculation method in the case of monthly and lumpsum payment to PPF account:

Monthly payments

For instance Amit is investing in his PPF account. Assuming the PPF interest rate to be 7.9% p. a. Know how the interest calculation will be made with below example.

Date of investmentBalance on the 5th of the month (Rs)Balance on the end of the month (Rs)Minimum Balance (Rs)Interest credited (Rs)Interest credited if the deposit is made before 5th (Rs)
02-04-2019 10,00010,00010,00065.8365.83
02-05-201920,00020,00020,000131.67131.67
07-06-201920,00030,00020,000131.67197.50
13-07-201930,00040,00030,000197.50263.33
03-08-201950,00050,00050,000329.17329.17
02-09-201960,00060,00060,000395.00395.00
02-10-201970,00070,00070,000460.83460.83
02-11-201980,00080,00080,000526.67526.67
02-12-201990,00090,00090,000592.50592.50
02-01-2020100,000100,000100,000658.33658.33
02-02-2020110,000110,000110,000724.17724.17
02-03-2020120,000120,000120,000790.00790.00
5003.345135.00

Notice how PPF account interest calculation is done in the highlighted rows in the above table. Essentially, you are losing on the interest if you are making a delay in payment which leads to an overall reduction in the interest earned.

Find interest and maturity amount by using Scripbox’s PPF Calculator

Lump sum payments

For instance Amit is investing as a lump-sum amount in the month of April itself. The below table is the interest rate calculation method in such a case:

Date of investmentBalance on the 5th of the monthBalance on the end of the monthMinimum BalanceInterest credited
02-04-2019150,000150,000150,000987.50
02-05-2019 150,000150,000987.50
07-06-2019 150,000150,000987.50
13-07-2019 150,000150,000987.50
03-08-2019 150,000150,000987.50
02-09-2019 150,000150,000987.50
02-10-2019 150,000150,000987.50
02-11-2019 150,000150,000987.50
02-12-2019 150,000150,000987.50
02-01-2020 150,000150,000987.50
02-02-2020 150,000150,000987.50
02-03-2020 150,000150,000987.50
11,850.00

What are the tax-saving benefits of PPF?

PPF savings scheme operates on an Exempt-Exempt-Exempt (EEE) model wherein all the investments made towards PPF are deductible under section 80C of the Income Tax Act. You can claim the deductions while filing your income tax return.

The withdrawal made from the account at the time of closure of PPF account is also exempt along with the accumulated interest. You can use Scripbox’s income tax calculator to calculate the taxable income and  tax payable.

The investors cannot withdraw the amount from PPF before the completion of the lock-in period of 15 years. The entire PPF maturity amount belongs to the account holder for life and is payable to the nominee(s) of the person after his/ her death.

How to check your PPF account balance?

Checking your PPF account balance can be done both online and offline. PPF account balance can be checked online only for those investors whose PPF accounts are held with the bank. All you need is your internet banking to be activated and you can check the status and balance your PPF account at any time.

For checking the balance offline, you need to visit the bank branch and get the PPF passbook updated. The passbook contains, date-wise, details of the investments made, interest credited, and the balance in your account.

Above all to make the customer experience easy, many banks have started to provide kiosks in their branches or ATMs wherein you can update your passbook at your convenience.

Advantages of PPF Account

Below are a few advantages of a PPF account:

  • Investment in PPF enables the investors to claim a tax exemption while filing your income tax return. The exemption is up to Rs. 1.5 lakhs in a year under section 80C of the Income Tax Act. 
  • The withdrawal of maturity amount at the time of closure of PPF account is tax exempt
  • This small savings scheme helps the investors in maintaining a retirement corpus to ensure financial stability post their retirement. Moreover, investors can invest either monthly or lump sum payments towards their investment.
  • Additionally, in case of financially difficult times, a loan can be taken against your balance standing in your PPF account. However, this facility is available only from the 3rd year to 6th year from investment.
  • Above all PPF accounts can be extended after the completion of 15 years in a block period of 5 years.
  •  The premature closure is allowed after completion of 5 years for medical treatment of family members and for higher education. However, the Premature closure of PPF account comes with a penalty of 1%.

Document required to open a PPF Account

To open a PPF account, you need submit document like PAN Card, Aadhar Card, etc. The details are mentioned below :

  • Identity Proof- Voter ID, PAN Card, Aadhar Card
  • Proof of Residence
  • Passport size photograph
  • Nomination Form

Public Provident Fund (PPF) vs Fixed Deposit (FD)

The table illustrates the difference between PPF and fixed deposit.

ParticularsPPFFixed Deposit
Period of investmentThe maximum period of PPF investment is 15 years. It does not provide any other investment period.The bank FD provides flexible investment periods. The investors can make an investment for as low as 60 days.
Loan against investmentIt offers loan against the PPF investment made only after 3 years of completionOne can get a loan against fixed deposit as per their needs. However, different bank FD have different rates of interest and repayment periods.
Rate of InterestPPF account interest rate is set up by the Government on a quarterly basis.The rate of interest is set by the bank
Premature WithdrawalSuch withdrawals are allowed only after the 5th year and to a limited extent.Premature withdrawal is allowed subject to a small fee charged by the bank.

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