PPF in India | PPF Interest Rates (2024)

FAQs

PPF in India | PPF Interest Rates? ›

The current PPF interest rate is 7.1% p.a. that is compounded annually. However, to receive the PPF interest for the deposit month, it is very important that you deposit your PPF amount within 5th of that month. The Finance Ministry sets the interest rate every year, which is paid on 31st March.

The current PPF interest rate is 7.1% (Q1 of FY 2024-25), the minimum investment tenure is fixed at 15 years while the investment amount can range between Rs. 500 to Rs. 1.50 lakh in a financial year.

This is calculated at the current interest rate of 7.1%. Investing the maximum amount of Rs 1.5 lakh every year in a PPF account would build a corpus of Rs 40.68 lakh in 15 years. At the same time, opting for extensions, with or without contributions, can further lead to a rise in the maturity amount.

You can see the calculations below. If you invest Rs 5,000 a month, or Rs 60,000 a year, your total investment in 15 years will be Rs 9 lakh, you will get an interest of Rs 7.27 lakh, and your maturity amount will be Rs 16.27 lakh.

How to Maximize PPF Returns? Invest before the 5th of every month. PPF interest is calculated on the lowest balance between the 5th and last day of every month. For instance, if you deposit Rs 10,000 on 2nd Jan and another Rs 10,000 on 15th Jan, the interest will only be calculated on Rs 10,000 and not Rs 20,000.

If you are looking for a low-risk investment option with a guaranteed return and a shorter time horizon, a fixed deposit might be a better option. If you are looking for a long-term investment option with the potential for higher returns, a Provident Fund might be a better option.

One needs to take their needs into account before investing in either LIC schemes or PPF. Both schemes offer tax benefits and are low-risk. If the motive of the investment is to create some wealth to beat inflation in the long run, the PPF may be a better choice.

Yes, an NRI can have a PPF account in India. However, the PPF account must have been opened while the person was still a resident of India. An NRI can only have a PPF account if they opened it as an Indian resident and prior to becoming an NRI.

The answer is no to whether PPF interest is taxable or not. PPF falls under the exempt- exempt-exempt (EEE) category. This means, the principal amount, the interest earned and the maturity amount of PPF is completely tax-free.

Now, suppose you invest Rs 50,000 per year in Canara PPF for 15 years at the current interest rate of 7.1%. Thus, the maturity value of your Canara PPF is Rs 13,56,070.

Which bank is best for PPF? ›

State Bank of India (SBI), which is the largest bank in the country, offers the PPF scheme with a good interest rate. SBI has over 15,000 branches in India, therefore, getting access to the scheme is easy.

In other words, this means that you cannot deposit more than Rs 150,000 in a PPF account in a financial year. However, there is no restriction on the number of deposits and you can deposit funds in multiples of Rs 50 in your PPF accout and a minimum of Rs 500 per annum.

When to deposit money in a PPF account? There is no specific due date as to when you should deposit money in a PPF account. However, it is beneficial for you to deposit money between 1 April and 5 April of a financial year.

However, experts suggest that it is beneficial to deposit money before the 5th of every month. This is because interest is calculated on the lowest balance in the PPF account after the 5th of every month to the last day of the month.

To get a clear idea of this formula, let's look at an example. Assuming you deposit an annual amount of Rs. 1 lakh in your PPF account for a period of 15 years at an interest rate of 7%, then the maturity amount on completion of PPF tenure will be equal to Rs. 28.82 lakh.

You will get ₹ 3,15,572 as maturity amount on Rs. 1000 deposits per month with 7.1% annual interest rate for 15 years. You can also deposit different amounts every month in PPF.

You can withdraw the money partially after completing 5 years from the account's opening date.