The Public Provident Fund (PPF) has been a favorite financial instrument for long term saving mainly due to its tax benefits and safety. According to IDFC First Bank, “PPF is among the best savings schemes in India, as it is a safe investment tool that helps you in the long term. You can start a PPF account with a post office or a bank. For 15 years, the money invested is locked in. After 6 years, you can only access a portion of the money in your PPF account. Because PPF is a long-term investment, you can prolong the term of your investment for an extra five years once the 15-year period has passed. You get compounded interest on your cumulative profits when you invest in a PPF.”
Getty Images
2/5
PPF’s latest interest rate
For the quarter ending June 30, 2022, the PPF interest rate is 7.1 percent per annum which is compounded yearly. Interest rates will be determined by the Ministry of Finance on a quarterly basis. At the end of each financial year, interest will be credited to the account.
Getty Images
3/5
How is interest calculated on PPF?
The interest is computed on the lowest balance in the account between the fifth and the last day of the month for the calendar month. Interest will be paid to the account at the end of each financial year.Each fiscal year, regardless of where the account stands at the end of the fiscal year, interest is credited to the account.
Getty Images
4/5
What is the minimum and maximum investment in PPF
In a financial year, the minimum deposit is Rs 500 and the maximum deposit is Rs 1.50 lakh. The maximum limit of Rs 1.50 lakh includes deposits made in his or her own account as well as those made on behalf of minors. Individuals can deposit from Rs 50 and up to Rs 1.50 lakh in any number of installments in a fiscal year.
Getty Images
5/5
Tax benefits of investing in PPF
One of the reasons PPF’s popularity is the tax benefit it offers – it comes under the EEE (exempt-exempt-exempt) tax status. What this means is that at the time of investment, the interest earned, and proceeds received at maturity are all tax-exempt or free. Further, PPF investment is eligible for deduction under Section 80C.
