Public Provident Fund (PPF) Interest Rate 2023: The current interest rate on PPF deposits is 7.1%. If there is no change in this rate by December 31, then the same would be applicable to PPF deposits made in the first quarter of New Year 2023.
Amid rising inflation and repo rate hikes by the Reserve Bank of India, PPF account holders are expecting an upward revision in the Public Provident Fund interest rate. More so because even several banks are offering higher interests on Fixed Deposit schemes than PPF. In past, the PPF scheme has enjoyed a higher interest than bank FDs.
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PPF Interest Rate 2023
The Union Government revises Public Provident Fund (PPF) interest rate on a quarterly basis. The next revision of the PPF interest rate will take place by the end of December 2022. Therefore, the PPF interest rate to be applicable in the first quarter of 2023 (January-March) will be known by December 31, 2022.
PPF Benefits 2023
PPF scheme provides several benefits to account holders. Following are the top five benefits of investing in a PPF account.
Guaranteed returns: PPF deposits enjoy a sovereign guarantee. So even if the bank or the post office fails, your deposits will be secure.
Triple tax benefits: The amount deposited in the PPF account, interest earned and the amount withdrawn from the account are exempt from taxes. You can deposit up to Rs 1.5 lakh/year and claim a deduction under Section 80C, provided you have not exhausted the prescribed limit under this section by investing in other schemes that also enjoy a similar benefit.
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Higher returns: PPF interest rate is generally higher than regular fixed deposit interest rates offered by banks and post office. The current rate of 7.1% on PPF is higher than many bank FDs.
Loan facility: You can get a loan against PPF deposits. Only one loan can be taken in a financial year. The second loan will not be provided till you repay the first loan. On paying the loan within 36 months of the loan being taken, an interest rate of 1% will be applicable. In case the loan is repaid after 36 months of the loan taken, then a loan interest rate of 6% per annum will be applicable.
Benefit of compounding: Deposits made in a PPF account earn compound interest, providing depositors with an opportunity to grow their wealth significantly over the long term. Calculations show that you can get up to Rs 1 crore or even more by investing in a PPF account.
