PPF Interest Rate FY 2022-23
The current PPF account interest rate remains unchanged by the Ministry of Finance for the quarter October 2022 to December 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.
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Current and Historical PPF Interest Rates
|Year||Max Investment Amount (Rs)||Interest Rate (p.a.)|
|1st Apr 2020 to Till Date||150000||7.10%|
|1st July 2019 to 31st March 2020||150000||7.90%|
|1st Oct 2018 to 30th Jun 2019||150000||8%|
|1st Jan 2018 to 30th Sept 2018||150000||7.60%|
|1st July 2017 to 30th Sept 2017||150000||7.80%|
|1st Apr 2017 to 30th June 2017||150000||7.90%|
|1st Oct 2016 to 31st March 2017||150000||8%|
|1st Apr 2016 to 30th Sept 2016||150000||8.10%|
|1st Apr 2014 to 31st March 2016||150000||8.70%|
|1st Apr 2013 to 31st March 2014||100000||8.70%|
|1st Apr 2012 to 31st March 2013||100000||8.80%|
|1st Dec 2011 to 31st March 2012||100000||8.60%|
|1st Apr 2011 to 30th Nov 2011||100000||8%|
|1st March 2003 to 31st March 2011||70000||8%|
|1st Apr 2002 to 28th Feb 2003||70000||9%|
|1st March 2002 to 31st March 2002||60000||9%|
|1st March 2001 to 28th Feb 2002||60000||9.50%|
|15th Jan 2000 to 28th Feb 2001||60000||11%|
|1st Apr 1999 to 14th Jan 2000||60000||12%|
|FY 1988 – 89||60000||12%|
|FY 1987 – 88||40000||12%|
|FY 1986 – 87||40000||10%|
|FY 1985 – 86||40000||9.50%|
|FY 1984 – 85||40000||9%|
|FY 1983 – 84||40000||8.50%|
|FY 1982 – 83||30000||8.50%|
|FY 1981 – 82||30000||8%|
|FY 1980 – 81||30000||7.50%|
|FY 1979 – 80||30000||7.50%|
|FY 1978 – 79||20000||7.50%|
|FY 1977 – 78||20000||7%|
|FY 1976 – 77||20000||7%|
|FY 1975 – 76||20000||7%|
|FY 1974 – 75||20000||5.80%|
|FY 1973 – 74||20000||5.30%|
|FY 1972 – 73||20000||5%|
|FY 1971 – 72||15000||5%|
|FY 1970 – 71||15000||5%|
|FY 1969 – 70||15000||4.80%|
|FY 1968 – 69||15000||4.80%|
What is Public Provident Fund (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:
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 investment||Balance 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)|
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 investment||Balance on the 5th of the month||Balance on the end of the month||Minimum Balance||Interest credited|
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.
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%.
Public Provident Fund (PPF) vs Fixed Deposit (FD)
The table illustrates the difference between PPF and fixed deposit.
|Period of investment||The 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 investment||It offers loan against the PPF investment made only after 3 years of completion||One 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 Interest||PPF account interest rate is set up by the Government on a quarterly basis.||The rate of interest is set by the bank|
|Premature Withdrawal||Such 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.|
Frequently Asked Questions
You can open a PPF account at all designated branches of public sector banks and private sector banks. Furthermore, you can open a PPF account at the nearest post office. Fill out the application form, and submit it along with the required documents and deposit amount.
To open a PPF account, you need to submit documents 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
Checking your PPF account balance can be done both online and offline. PPF account balances can be checked online only for those investors whose PPF accounts are held with the bank. All you need is for your internet banking to be activated, and you can check the status and balance your PPF account at any time.
To check 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.