PPF Interest Rate: Important news for PPF account holders: the government has declared PPF interest, which should be known right now

 PPF Interest Rate: Important news for PPF account holders: the government has declared PPF interest, which should be known right now

PPF Interest Rate: Important news for PPF account holders: the government has declared PPF interest, which should be known right now

Interest Rate for Small Savings Plans: This year, there was not even a single adjustment made to the Public Provident Fund interest rates. Tell us the current status of the PPF interest rate for the next year.

For those who invest in modest savings plans, the government is offering a present for the new year. Numerous modest savings programs, such as Sukanya Samriddhi Yojana, now feature variable interest rates. On Friday, December 29, the government revealed new interest rates after the most recent review for the last quarter of the current fiscal year, which runs from January to March 2024. Nonetheless, PPF, or Public Provident Fund, investors have also experienced disappointment this time.

alterations to their interest rates

According to an official announcement released on Friday, modest savings program interest rates have been raised by 10 to 20 basis points, or 0.20 percent. The largest beneficiary is Sukanya Samriddhi Yojana, whose interest rate has now risen by 0.20 percent to 8.20 percent. This is the second time in a year that interest in it has grown. Concurrently, the interest rate on three-year deposits has been raised to 7.10 percent, a rise of 0.10 percent. The appeal of alternative little savings plans has not changed.

Rates of interest for small savings accounts

The interest rates on different modest savings plans are as follows as of the most recent adjustments. The three months from January to March of 2024 are covered by these tariffs. In March of the following year, the interest rates for the first quarter of the next fiscal year, or April through June of 2024, will be reassessed.

little savings planInterest (percentage) for January–March 2024Interest (percentage) for October–December 2023

savings account4.00 4.00 A one-year charge6.90 · 6.90

two-year down payment7.00 · 7.00

three-year down payment7.10 – 7.00 five-year hold7.50 – 7.60

Five-Year Cumulative DepositSenior Citizen Savings Plan 6.70–6.708.20 Monthly income account (8.107.40 A national savings certificate worth 7.407.70 Public Provident Fund 7.707.10 7.10

Kisan The Vikas Patra7.50 115-month period 7.50 115-month period

Sukanya Samriddhi Yogi8.20 8.0

 

PPF is well-liked for these reasons.

PPF has been a well-liked choice for those with modest savings. Investors who make this investment get several advantages all at once. Saving money today contributes to safeguarding one's life after retirement. This offers the advantage of steady returns at a lower risk. Investing in PPF offers investors several tax-related advantages in addition to this.

Income tax has two benefits.

Income up to Rs 1.5 lakh may be tax-free when contributed to or invested in PPF under Section 80C of the Income Tax Act. In a financial year, the maximum amount that may be invested in this plan is Rs 1.5 lakh. Nonetheless, PPF income is thus entirely tax-free. There is no income tax applied to either the interest accrued on PPF or the amount paid at maturity.

Not altered since April 2020

Following the most recent adjustments, the PPF interest rate remains constant at 7.1 percent. Some modest savings plans had their interest rates raised twice this year, whereas PPF saw no changes at all. People were really hopeful that the government will raise interest on PPF this time. But PPF investors are let down once again. Actually, since April 2020, PPF's interests have remained unchanged. Given that the same interest will persist till March 2024. This indicates that the four-year era of constant interest rates on PPF will come to an end.

Compared to the fixed formula, the interest is much lower.

The Shyamal Gopinath Committee's recommendations serve as the foundation for determining PPF interest rates. In order to provide investors with market-linked interest rates, the committee proposed tying the interest rate on PPF to the yield on 10-year government securities. The committee recommended that PPF interest rates be set 0.25 percent higher than the return on 10-year government bonds. In September and October of 2023, the yield on the benchmark 10-year bond was 7.28 percent. As a result, the model indicates that the PPF interest rate should be 7.53 percent.