PPF Interest Rate History: Public Provident Fund (PPF) is a long-term retirement saving scheme to provide a secure post-retirement. The Government of India usually offers the PPF, and the PPF rates are said to be 7.1 percent from April 2020 to June 2021. The most troubling question is if the PPF Interest Rate is fixed? What are the new PPF withdrawal rules? How does one often fix PPF changes? What is the range of PPF interests over the years? This article on PPF Interest Rate History is the solution to your questions.
PPF Interest Rate History
PPF, or Public Provident Fund, was launched from 1968 to 1969. However, the historical returns of the Public Provident Fund since 1968 are elucidated below-.
Earlier the PPF interest rates were announced once a year. However, from 2016 to 2017, the Public Provident Fund rate of interest is reported quarterly. This is done based either on the previous quarter’s yield on benchmark government securities or the bonds of corresponding maturities and a few extra of about 0.25 percent.
It is to note that the Public Provident Fund or the PPF interest is calculated on the lowest balance and is usually done between the 5th day and the end of the month every month. However, the Public Provident Fund interest is credited only to the financial end period of the year.
- The Public Provident Fund Interest rate in 1968 to 1969 and 1969 to 1970 was 4.8 percent precise.
- The PPF Interest rate was slowly raised and peaked at 12% between April 1, 1986, to January 14, 2000.
- The PPF interest rate fell again and reached eight percent in 2011.
- The PPF interest rate slowly increased again and reached 8.8 percent from 2012 to 2013.
- The PPF fell to 7.9 percent in June 2019 and remained at that pace till Mar 2020.
- It has now further reduced to 7.1 percent from April to June 2020.
Essential Features Of Public Provident Fund
- Tenure: The Public Provident Fund holds a minimum of 15 years of the term, which can be extended in blocks of five years as per the individual’s request.
- Investment Limits: Public Provident Fund allows the investor to hold a minimum investment limit of Rs 500 and a maximum investment limit of Rs 1.5 lakh for each financial year. However, the investments can be made either as a lump sum or in a maximum of 12 instalments.
- Opening Balance: The PPF account can be opened with just Rs 100, and the annual investments reach above Rs 1.5 lakh. However, this will not earn the interest and is not applicable or eligible for tax saving.
- Deposit Frequency: Deposits credited into a Public Provident Fund account have to be noted to be made at least once every year for 15 years.
- Deposit Method: The deposit method for a Public Provident Fund account can be made through modes such as a cheque, award of cash, through Demand Draft or even an online fund transfer.
- Nomination: A Public Provident Fund account holder can designate a nominee for her or his account. This can be done either at the time of opening the account or subsequently.
- Joint accounts: A rule stated is that the Public Provident Fund account can only be held only in the name of one individual. Therefore, opening an account in joint terms is ruled out.
- Risk factor: Since the Indian Government backs the Public Provident Fund, a PPF fund offers guaranteed, risk-free returns and complete capital protection. However, the potential risk element involved in holding a Public Provident Fund account is minimal.
PPF Interest Rate Over Years
Public Provident Fund Interest rate over the years in also tabulated below for a brief comprehension-
| Year Range | Public Provident Fund Interest Rate |
| 1968- 1969 | 4.80 percent |
| 1969- 1970 | 4.80 percent |
| 1970- 1971 | 5 percent |
| 1971- 1972 | 5 percent |
| 1972- 1973 | 5 percent |
| 1973- 1974 | 5.30 percent |
| 1.4.1974 to 31.7.1974 | 5.80 percent |
| 1.8.1974 to 31.3.1975 | 7 percent |
| 1975-1976 | 7 percent |
| 1976-1977 | 7 percent |
| 1977-1978 | 7.50 percent |
| 1978-1979 | 7.50 percent |
| 1979-1980 | 7.50 percent |
| 1980-1981 | 8 percent |
| 1981-1982 | 8.50 percent |
| 1982-1983 | 8.50 percent |
| 1983-1984 | 9 percent |
| 1984-1985 | 9.50 percent |
| 1985-1986 | 10 percent |
| 01.04.1986 to 14.01.2000 | 12 percent |
| 15.01.2000 to 28.02.2001 | 11 percent |
| 01.03.2001 to 28.02.2002 | 9.50 percent |
| 01.03.2002 to 28.02.2003 | 9 percent |
| 01.03.2003 to 30.11.2011 | 8 percent |
| 01.12.2011 to 31.03.2012 | 8.60 percent |
| 01.04.2012 to 31.03.2013 | 8.80 percent |
| 01.07.2019 to 31.03.2020 | 7.90 percent |
| 01.04.2013 to 31.03.2016 | 8.70 percent |
| 01.04.2016 to 30.09.2016 | 8.10 percent |
| 01.10.2016 to 31.03.2017 | 8 percent |
| 01.04.2017 to 30.06.2017 | 7.90 percent |
| 01.07.2017 to 31.12.2017 | 7.80 percent |
| 01.01.2018 to 30.09.2018 | 7.60 percent |
| 01.10.2018 to 30.06.2019 | 8 percent |
| 01.04.2020 onwards | 7.10 percent |
Why Does A Public Provident Fund Interest Rate Change?
The earlier Public Provident Fund Interest rates were announced once a year. However, the Public Provident Fund interest rate shifted to a quarterly announcement from 2016 to 2017 based on the previous quarter’s yield on both the benchmark government securities or bonds of corresponding maturities and a few extra around 0.25 percent.
The Indian Government issues the 10-year Treasury Public Provident Fund bonds with funding itself, a debt obligation. A 10-year Treasury note helps to pay interest at a fixed rate on a half-yearly basis. It also delivers the face value to the account holder at maturity. In June 2020, the PPF benchmark was 6.45 percent, and the bond maturing in 2029 offered a 5.97 percent yield, the lowest since January 27, 2009.
Is It A Public Provident Fund That Makes One Crorepati?
With Public Provident Fund interest rates going down, it is to be noted that one needs to invest longer to become crorepati by investing in Public Provident Fund.
Using the 7.1 percent interest for the entire period, account holders can become crorepati after investing in Public Provident Funds for over 25 years, however not overnight.
In this period of 25 to 30 years, an individual can invest in Rs 45 lakh, and the Public Provident Fund interest getting credit into the Public Provident Fund would account for Rs 1,09,50,911. So, in short, there are chances that an individual can become a crorepati by investing in a Public Provident Fund.
Should One Invest in PPF?
The Government of India runs a Public Provident Fund (PPF), and hence it is almost risk-free and is a highly safe platform to invest in. However, it also falls under the Exempt Exempt Exempt category.
- It would be best to remember that the money you invest is eligible for tax deduction under Section 80C, which is up to Rs.1,50,000 currently.
- The Public Provident Fund interest income earned every year is tax-free. And is a must to be included in the ITR.
- The maturity amount in terms of PPF is also completely tax-free.
Hence, the Public Provident Fund is a part of their debt portfolio for many account holders where the returns do not fluctuate like stocks or equity MFs.
What was the highest PPF interest rate ever?
12%
The highest interest rate that the Employees’ Provident Fund (EPF) and Public Provident Fund (PPF) have ever offered was 12%. PPF hit that peak between 1 April 1986 and 14 January 2000, while EPF offered that rate from FY1990 to FY2001.
How much we get after 15 years in PPF?
PPF Calculation Examples for Different Investment Tenures
What is the PPF interest rate for 2020 21?
As per the ministry circular, PPF will continue to earn 7.10%, the NSC will fetch 6.8%, and Post Office Monthly Income Scheme Account will earn 6.6%. Here is a look at the interest rates on various small savings schemes for the second quarter of FY 2021-22.
Which bank has highest PPF interest rate?
State Bank of India (SBI)
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.
Can I have 2 PPF accounts?
As per the Public Provident Fund (PPF) Scheme rules, an individual cannot have more than one account. However, many people still inadvertently end up opening more than one PPF account; they would have opened PPF accounts with two different banks or with a post office and a bank as well.
What is CAGR of PPF?
PPF Returns vs ELSS Returns
According to Value Research, the 5-year CAGR of the ELSS category is 21.19% compared to 8.2% for the PPF.
How can I get 1 crore from PPF?
So, like mutual fund SIP, a PPF account holder can accumulate ₹1 crore by simply investing ₹9,000 per month in one’s PPF account for 30 years using extension facility in 15th, 20th and 25th year of PPF account opening.