PPF Interest Rate 2020-21
- PPF, or Public Provident Fund, is a government-run savings programme designed at helping small depositors grow their money over time. It is one of the most popular choices for people who want to earn assured returns on their investments while avoiding market risk. It's best for small savers who want to put a portion of their money into a PPF account regularly and build up a corpus over time.
- When compared to other government-backed fixed-income products like National Savings Certificates (NSC), Post Office Time Deposits, and so on, PPF offers some of the highest interest rates. PPF rates have traditionally been higher than bank-offered Fixed Deposit rates to encourage Indian households to save for their long-term future.
- The government sets the PPF interest rate every quarter. The current interest rate for PPF accounts has been set at 7.1% for (July-September) FY 2021-22. The ppf interest rate 2020-21 was the same 7.1%. It was 7.90% for the financial year 2019-20.
Interest Rate (p.a.)
1 July 2021- 30 September 2021
1 April 2021 - July 2021
1 January 2021 - 31 March 2021
1 October 2020 – 31 December 2020
1 July 2020 - 30 September 2020
1 April 2020 - 30 June 2020
1 January 2020 - 31 March 2020
1 October 2019 - 31 December 2019
1 July 2019 - 30 September 2019
1 April 2019 - 30 June 2019
1 January 2019 - 31 March 2019
1 October 2018 - 31 December 2018
1 July 2018 - 30 September 2018
1 April 2018 - 30 June 2018
1 January 2018 - 31 March 2018
01 October 2017 - 26 December 2017
01 July 2017 - 30 September 2017
01 April 2017 - 30 June 2017
01 January 2017 - 31 March 2017
01 October 2016 - 31 December 2016
01 July 2016 - 30 September 2016
01 April 2016 - 30 June 2016
01 April 2015 - 31 March 2016
Benefits of Having a PPF account
- The following are some of the most significant benefits of owning a PPF account as an Indian citizen:
- The amount you deposit in their PPF account is deductible under Section 80C of the Income Tax Act if you put up to Rs. 1 lakh every year. Contributions to the PPF accounts of the assessee's spouse and/or children are likewise tax-deductible under Section 80C.
- The money in a PPF account cannot be used to pay off debts or liabilities. The money in a PPF account belongs to the account holder for the rest of his or her life and is due to the account holder's nominee(s) after his or her death.
How is PPF interest calculated?
- Every month, the returns on the PPF balance are computed using the current interest rate for the quarter. The whole interest generated in a financial year, on the other hand, is only credited to the PPF account at the end of the year.
- It should be remembered that from the 5th to the final day of each month, PPF interest is paid on the lowest balance in the account. For example, if your PPF account balance is Rs. 20,000 on April 1, 2021, and you deposit Rs. 40,000 on April 8, 2021, your April interest will be calculated on Rs. 20,000 instead of Rs. 60,000. However, if you deposit the same money on April 4, 2021, you will get Rs. 60,000 in interest.
- PPF is also compounded annually, which means that the interest earned on the previous year's accumulated PPF balance will be added to your principal amount, earning interest in the current year.
- Annual compounding can be tremendously helpful for a long-term investment. You can extend the PPF with or without contributions even after it has reached maturity. Because of annual compounding, if you choose to extend your PPF for another 5 years without making any more contributions, the additional returns can be substantial.
PPF Account for minors
- Parents/legal guardians can also open PPF accounts on behalf of their minor children. However, the maximum contribution that can be made in a financial year (to the account of both the child and the adult) is Rs 1.5 lakh.
- A father, for example, cannot put Rs 1.5 lakh in his own account and another Rs 1.5 lakh in his daughter's account, but he or she can put Rs 90,000 in his or her own PPF account and Rs 60,000 in his or her child's account. Minors' PPF accounts will earn the same rate of interest as adult PPF accounts. It should be noted that nominations for a minor's PPF account are not permitted.
PPF account after maturity
- PPF accounts have a 15-year minimum lock-in period from the date of opening. Account holders have two options when their PPF account matures after 15 years:
- They have the option to withdraw the entire balance in their PPF account.
- They can keep their PPF account open for another five years. They will be able to continue contributing and earning interest on their overall PPF balance as a result of this. However, the application for extension must be submitted within one year of the PPF account's maturity date. PPF account extensions come in 5-year blocks, however, there is no limit to how many extensions you can get.
- When a PPF account reaches maturity and the account holder does not take any action for a year, the account is automatically renewed as default, generating interest. In this circumstance, however, no further payments to the PPF account are permitted.
Frequently asked questions
What is the maximum amount that can be deposited in the PPF?
As a subscriber, you can deposit any amount in the PPF programme in a financial year, ranging from Rs.500 to Rs.1.5 lakh.
When will I be able to take money out of my PPF account?
From the 7th financial year forward, you can only take money from the PPF scheme once a year.
Is it possible to deduct the money deposited in the PPF scheme?
Yes, you can deduct the money you put into the PPF scheme under Section 80C of the Internal Revenue Code.
Is it possible to get a loan under the PPF scheme?
Yes, you can use the PPF scheme to get a loan from the third financial year to the sixth financial year.
Is it necessary for me to pay income tax on the interest collected on my PPF account?
No, you won't have to pay taxes on the interest you earn. Section 10 (15) of the Income Tax Act exempts all interest earned totally.