The government is set to assess the interest rates of the Public Provident Fund (PPF) scheme by the end of this month, with speculation on a potential adjustment.
Currently holding steady at 7.1 percent since April 2020, the interest rate for the PPF scheme may undergo revision in the government’s upcoming meeting on September 30.
These adjustments to interest rates are made every three months.
Will PPF Interest Rates Increase?
Financial experts anticipate that the Finance Ministry may maintain the current interest rate for PPF accounts at 7.10 percent for the October to November quarter, extending until September 2023. The quarterly interest rates are credited to investors’ PPF accounts at year-end.
Experts recommend initiating PPF investments at the start of the year to maximize annual interest benefits.
Depositing a fixed sum before the 5th of each month ensures interest accrual throughout the month, providing investors with the highest returns on their deposits.
Tax Benefits in PPF
One of the standout features of the PPF scheme is its tax-saving benefits for depositors.
Under Section 80C, investors can claim income tax benefits on annual investments of up to Rs 1.5 lakh.
Additionally, the maturity amount remains tax-free. The upcoming review on September 30, 2023, will determine the new interest rates for the September-November quarter of the 2023-24 fiscal year.
Notably, interest rates for small savings schemes increased by 30 basis points for the July-September 2023 quarter.