Public Provident Fund (PPF) interest rate: The interest rates of small savings schemes are due for revision today, 30 June 2023. People are wondering whether the govt will hike the interest rate of the Public Provident Fund (PPF) in the July-September quarter as PPF interest rates have remained unchanged since April 2020. At present your PPF deposits fetch you 7.1 per cent.
While declaring small savings interest rates from April 2023, the central government announced a 10 bps to 70 bps interest rate hike for various small saving schemes, which include the Senior Citizen Savings Scheme, Sukanya Samriddhi Account Scheme, Monthly Income Savings Scheme, National Savings Certificate, Kisan Vikas Patra, and all post office time deposits. However, the GoI decided to leave Public Provident Fund (PPF) interest rate unchanged at 7.10 per cent.
The interest rates on small savings schemes are typically reviewed every quarter by the government.
How to open PPF accounts?
PPF accounts can be opened in any PSU or private bank. It has a maturity period of 15 years and a PPF account can be opened with a minimum ₹100 deposit. However, one needs to deposit a minimum of ₹500 in one financial year to keep one’s PPF account in active mode.
PPF and taxation rule
Under Section 80C of the income tax act, an earning individual can claim an income tax rebate on up to ₹1.50 lakh investment in one’s PPF account in a single financial year.
PPF interest rate calculation
Explaining PPF interest rate calculation, SEBI registered tax and investment expert Jitendra Solanki said, “PPF interest is calculated on the basis of minimum balance from 5th to last date of the month. So, if a PPF account holder deposits on or before the 4th date of the month, then in that case the PPF account holder will be able to earn PPF interest of that month as well.”
This means, if an investor invests by the 4th of April in one’s PPF account, then the PPF account holder will get interest on one’s deposit in the month of April as well as PPF interest will be calculated on the minimum PPF balance from the 5th ofApril to 30th April 2023.
Parents must open a PPF account for kids
“As per paragraph 3 of the Public Provident Fund Scheme, 2019, any parent or legal guardian can open a Public Provident Fund account in the name of a minor child. Please note that not more than PPF one account can be opened in the name of a person. Under the PPF scheme, 2019 there is no restriction on any of the parents or both parents contributing to the PPF account of a minor child,” said tax and investment expert Balwant Jain.
Source By: livemint
