Public Provident Fund – Interest Rate 2024, Withdrawal & Account Opening, Tax Benefits.
Introduction:
The Public Provident Fund (PPF) is a popular long-term investment option backed by the Indian government. Introduced in 1968, the motto of the scheme is encouraging savings among Indian citizens, especially for their retirement. Offered by the Central Government, the balance in the Public Provident Fund account is not subject to attachment under any order or decree of court under the Government Savings Banks Act, 1873.
Summary:
Government-Backed Scheme:
Public Provident Fund is a government-backed savings scheme available for residents of India.
Long-term Investment:
It’s designed to provide long-term financial security and is especially beneficial for retirement planning.
Tax Benefits:
Contributions made to Public Provident Fund are eligible for tax deductions under Section 80C of the Income Tax Act, making it a tax-efficient investment avenue.
Fixed Tenure:
Public Provident Fund has a fixed tenure of 15 years, although it can be extended indefinitely in blocks of 5 years.
Interest Rate:
The interest rate on Public Provident Fund is set by the government and is compounded annually. Historically, Public Provident Fund interest rates have been relatively higher compared to other fixed-income investments.
Minimum and Maximum Investment:
The minimum amount required to open a Public Provident Fund account is nominal, and there’s a maximum annual investment limit imposed by the government, which can vary from time to time.
Loan Facility:
After a certain period, account holders can avail of loans against their Public Provident Fund balance.
Partial Withdrawals:
Partial withdrawals are permitted from the 7th year of account opening, subject to certain conditions.
PPF – Key Information:
|
Interest Rate |
7.1% per annul |
|
Minimum Investment Amount |
Rs.500 |
|
Maximum Investment Amount |
Rs 1.5 lakh per annul |
|
Tenure |
15 years |
| Risk Profile |
Offers guaranteed, risk-free returns |
| Tax Benefit |
Up to Rs.1.5 lakh under Section 80C |
Articles on Public Provident Fund Account (PPF) :
Benefits:
This article would delve into the various benefits and features of the Public Provident Fund , including tax benefits, interest rates, and flexibility.
Open an Account:
A step-by-step guide on how to open a Public Provident Fund account, including the documentation required and where to apply.
Options:
Comparing Public Provident Fund with other popular investment options like Fixed Deposits, Mutual Funds, and National Savings Certificates, highlighting the advantages and disadvantages of each.
Interest Calculation:
An article explaining how interest is calculated on Public Provident Fund balances and the impact of compounding over the long term.
Maximising Returns:
Tips and strategies for maximising returns from a Public Provident Fund account, such as optimising contributions and timing withdrawals.
Extension Rules:
Explaining the rules and procedures for extending a Public Provident Fund account beyond the initial 15-year term and guidelines for partial and complete withdrawals.
Withdrawals:
Discussing the tax implications of withdrawals from a Public Provident Fund account, including exemptions and taxable components.
Retirement Planning:
How Public Provident Fund can be a cornerstone of retirement planning, including strategies for using Public Provident Fund alongside other retirement investment vehicles.
Young Investors:
A guide specifically tailored for young investors, highlighting the benefits of starting a PPF account early in life and the potential impact on long-term financial goals.
Risk-Averse Investors:
Exploring why the Public Provident Fund is an ideal investment for risk-averse investors, emphasizing its stability and government backing.
Interest rates:
2020-2021
| Period | Interest Rate |
| April 2020 – March 2021 | 7.1% |
2021-2022
| Period | Interest Rate |
| April 2021 – March 2022 | 7.1% |
2022-2023
| Period | Interest Rate |
| April 2022 – March 2023 | 7.1% |
2023-2024
| Period | Interest Rate |
| April 2023 – March 2024 | 7.1% |
Calculation formula:
M = P [ ( { (1 + i) ^ n } – 1 ) / i ]
M = Maturity benefit
P = Annual instalments
i = Interest rate
n = Number of years
PPF calculator example table:
| Investment Period | Total PPF Investment | Total Interest Earned | Maturity Value |
| 15 years | Rs. 1.5 lakh | Rs 18,18,209 | Rs 40,68,209 |
| 20 years | Rs 1.5 lakh | Rs 36,58,288 | Rs 66,58,288 |
| 30 years | Rs 1.5 lakh | Rs 1,09,50,911 | Rs 1,54,50,911 |
The Public Provident Fund calculation example, it is assumed that the annual investment amount is Rs 1,50,000, and the Public Provident Fund interest rate is 7.1% per annul in the quarter financial year of 2023-2024. The above example highlights the power of compounding when investing in a Public Provident Fund. Your maturity amount rises from Rs 40 lakh to Rs 1 crore merely by investing Rs. 1.5 lakh over a 15-year period to a 30-year period.
Other information:
More details:
