Do you want to invest in a PPF Account and secure the future of your loved ones? If so, PPF Scheme can be a great one to do so. In this article, we have mentioned everything on what is PPF, PPF Interest Rates of various Banks, How to Check PPF Account Balance, Formula to Calculate Public Provident Fund Interest Rate, et. In addition to these, you will also learn about the Benefits of having a PPF Deposit Account, Tax Exemptions you can avail by having one in the further modules.
- What is PPF?
- Current PPF Interest Rates of Different Banks
- How is Interest in PPF Account Calculated?
- How to Check Balance in a PPF Account?
- PPF Interest Rate Calculation Formula
- Benefits of having a PPF
- Taxation on Interest Rates for PPF
- Can I avail Tax Exemptions for the amount paid in the PPF Account Scheme?
- Do I need to pay tax on the interest earned in PPF Account?
- Can I withdraw money from the PPF Account?
What is PPF?
PPF stands for Public Provident Fund and it came into force in 1968 with an aim to mobilize small savings investment with reasonable returns and has additional benefits like tax savings, etc. As of now, the Interest Rates PPF is 7.1% compounded annually. The risk involved in the PPF Account is very minimal and offers risk-free returns. PPF falls under the EEE Category thus the amount invested, interest earned are all tax-free at the time of maturity.
Current PPF Interest Rates of Different Banks
Below is a table that describes the PPF Interest Rates History. Check out the historical PPF Interest Rates and get acquainted with the best interest rates on PPF Account.
| From Year | To Year | Interest Rate |
|---|---|---|
| April 2020 | March 2021 | 7.10% |
| July 2019 | March 2020 | 7.90% |
| April 2019 | June 2019 | 8.00% |
| January 2019 | March 2019 | 8.00% |
| October 2018 | December 2018 | 8.00% |
| July 2018 | September 2018 | 7.60% |
| April 2018 | June 2018 | 7.60% |
| January 2018 | March 2018 | 7.60% |
| October 2017 | December 2017 | 7.80% |
| July 2017 | September 2017 | 7.80% |
| April 2017 | June 2017 | 7.90% |
| April 2016 | March 2017 | 8.10% |
| April 2015 | March 2016 | 8.70% |
| April 2014 | March 2015 | 8.70% |
| April 2013 | March 2014 | 8.70% |
| April 2012 | March 2013 | 8.80% |
| April 2011 | March 2012 | 8.60% |
| April 2010 | March 2011 | 8.00% |
| April 2009 | March 2010 | 8.00% |
| April 2008 | March 2009 | 8.00% |
| April 2007 | March 2008 | 8.00% |
| April 2006 | March 2007 | 8.00% |
| April 2005 | March 2006 | 8.00% |
| April 2004 | March 2005 | 8.00% |
| April 2003 | March 2004 | 8.00% |
| April 2002 | March 2003 | 9.00% |
| April 2001 | March 2002 | 9.50% |
| April 2000 | March 2001 | 11.00% |
| April 1999 | March 2000 | 12.00% |
| April 1998 | March 1999 | 12.00% |
| April 1997 | March 1998 | 12.00% |
| April 1996 | March 1997 | 12.00% |
| April 1995 | March 1996 | 12.00% |
| April 1994 | March 1995 | 12.00% |
| April 1993 | March 1994 | 12.00% |
| April 1992 | March 1993 | 12.00% |
| April 1991 | March 1992 | 12.00% |
| April 1990 | March 1991 | 12.00% |
| April 1989 | March 1990 | 12.00% |
| April 1988 | March 1989 | 12.00% |
| April 1987 | March 1988 | 12.00% |
| April 1986 | March 1987 | 12.00% |
How is Interest in PPF Account Calculated?
Interest on PPF can be calculated depending on the balance in your account from the 5th to the final day of every month. Thus, if you wish to deposit a lumpsum amount at any time in the year you need to do that on or before the 5th of every month. By doing so, you can earn interest on the amount for the entire month. You can use a PPF Calculator to find out the interest rates in PPF.
How to Check Balance in a PPF Account?
Follow the simple steps listed below to check the balance amount in your PPF Account. They are as follows
- Try contacting your bank or post office branch to know the status of the PPF Account.
- If your bank has an online banking facility you can request your bank to link the PPF Account to concerning online banking account. On linking the account you can access your PPF Account and do the basic functions like viewing or checking the status of your PPF Account. You can even make online payments to your PPF Loans.
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PPF Interest Rate Calculation Formula
The formula for calculating expected interest on PPF Deposit is given below:
A = P [({(1+i) ^n}-1)/i]
Where A is the maturity amount
P is the principal amount invested in the PPF account
I is the expected interest rate of return on the PPF scheme
N is the tenure for which is the amount is invested in the PPF scheme
From the above formula, it is evident that the return will be higher for a higher investment period.
Benefits of having a PPF
Below are some of the benefits that an Indian Citizen having a PPF Account can have and they are as follows
- If you want to deposit up to 1 lakh per annum in PPF Account the sum is deductible under Section 80C of the Income Tax Act. Contributions made to PPF Account are eligible for tax deduction under Section 80C.
- One can’t claim the amount in PPF Account to meet the cases of debt/liability. The Entire Amount in PPF Account is given to the account holder for life and is payable to nominees after the death of the person.
Taxation on Interest Rates for PPF
Interest Rates on PPF are completely tax-free. Contribution by Spouse or Children in PPF Account qualifies for PPF Tax Exemptions. PPF Account Investment belongs to the category EEE(Exempt-Exempt-Exempt).
- Deposits up to 1.5 Lakh per Annum qualify under tax deductions under Section 80C of the Income Tax Act.
- Interest accrued on PPF Account also falls under Tax Exemption.
- The maturity value of PPF Investment is also eligible for Tax-Free.
FAQs on Public Provident Fund Account Interest Rates
1. Can I avail Tax Exemptions for the amount paid in the PPF Account Scheme?
Yes, you can avail the Tax Exemptions for the amount paid in the PPF Account Scheme under Section 80C of the Income Tax Act.
2. Do I need to pay tax on the interest earned in PPF Account?
No, you need not pay any taxes on the interest earned.
3. Can I withdraw money from the PPF Account?
Account-holders can make a partial withdrawal from the PPF Account every year starting from 7th financial year.