PPF Rate Revision: Lakhs of Indians invest in Post Office schemes. Even today, it is considered the most reliable option for savings. There is no risk of any kind when investing here. Returns are guaranteed.
Post Office has great schemes for everyone, from children and women to senior citizens. Included in this list is the Post Office Public Provident Fund Scheme, which is considered to be the best in terms of investment. By depositing money in this scheme, you can create a huge fund. This scheme once had a great interest rate. After this, reductions started. Despite this reduction, the interest of investors remains the same even today.
Let us tell you that the Central Government reviewed the interest rates of small savings schemes running in the country for the December quarter and did not consider any change in it. In such a situation, investors waiting for the interest rate hike in Public Provident Fund ( PPF ) have once again been disappointed. There has been no change in the interest rates of PPF since April 2020. Currently, it is 7.1 percent annually, which is lower than many other schemes of the Post Office. However, this scheme can still be called a crorepati scheme.
PPF interest rates fall sharply
In the 1990s, PPF offered interest rates of up to 12%. Over time, interest rates steadily declined. Until January 1, 2000, the PPF interest rate was 12% annually. Then, on January 15, 2000, the PPF interest rate was cut by 1% for the first time. In 2001, it rose to 9.5%, in 2002 to 9%, and in 2003 to 8%. In 2012, it rose slightly to 8.8%. In 2013, it rose again to 8.7%. In 2016, it reached 8.1% and fell to 7.6% by 2018. Since 2020, it has remained stable at 7.1%.
You can become a millionaire even at the current interest rate.
Up to ₹1.50 lakh can be deposited in PPF each financial year. The current interest rate on this scheme is 7.1% per annum. Its maturity period is 15 years. However, it can be extended for five more years after maturity. Note that it can be extended for five years at a time. After the first extension period is complete, it can be extended for another five years.
How much will be the fund if you deposit Rs 50,000 annually?
A minimum of ₹500 and a maximum of ₹1.50 lakh can be deposited into a PPF account in a year. Compounding is the biggest strength of PPF. This means that the earlier you start investing, the more time your money will have to grow. However, a small investment made at the age of 20-25 can create a much larger corpus than a large investment made at the age of 40-50. A PPF account matures in 15 years. If you wish, you can extend it for another 5 years by filling out a form.
Any PPF account can be extended for 5 years at a time, up to a maximum of 50 years. A PPF account can be opened at any bank. You can also open one at your nearest post office. If you deposit ₹50,000 annually into your PPF account, you will receive a total of ₹3,436,005 after 25 years. This includes your investment of ₹1,250,000 and interest of ₹2,186,005.
Tax benefits in PPF
PPF falls under the Triple-E (Exempt-Exempt-Exempt) category. This means it offers tax exemptions at three levels. First, you’ll receive tax exemption under Section 80C on investments up to ₹ 1.5 lakh per year. Second, the interest earned on the investment is completely tax-free. Third, there’s no tax on the entire amount received upon maturity after 15 years. This is why PPF is considered more beneficial than options like FDs.
