The common man trusts the Public Provident Fund (PPF) the most for guaranteed returns. But is PPF still a profitable deal? Is this savings of yours continuously decreasing, let us know…
common man his savings (Govt Saving Scheme for Middle Class) For when tax-free and guaranteed returns (Tax Free and Guaranteed Return Schemes) public provident fund first in his mind (PPF) Scheme comes. But is PPF still a profitable deal amidst the changing times and new investment options? Is it that your savings are continuously decreasing?
Interest rate has not changed since 2020
The interest on PPF is decided by the Ministry of Finance. It is reviewed every quarter. From April 2020, the interest rate available on PPF remains at 7.1 percent. At the same time, inflation has increased a lot during this period.
ever-decreasing interest rate
The tax-free investment limit in PPF was increased to Rs 1.5 lakh annually in 2014. On the other hand, if we look at the interest received on it, then since 2013 it is continuously declining.
In the year 2013, interest was available on PPF at the rate of 8.8 percent. Later in 2014 it decreased to 8.7 percent. After this, a major change took place in the year 2016 and on April 1, 2016, the PPF interest rate came down to 8.1 percent.
After this, it was cut one more time in 2016 and on October 1, 2016, the interest rate of PPF was reduced to 8 percent. It remained like this till 31 March 2017.
When the interest rate came below 8 percent
In the year 2017, on April 1, the government reduced the PPF interest rate to 7.9 percent. Three months after this, in July 2017, the interest of PPF was reduced to 7.8 percent.
After this, the government reduced the interest rate of PPF to 7.6 percent on January 1, 2018. However, on October 1, 2018, it was increased back to 8 percent. Later on July 1, 2020, it came down to 7.9 percent. After this, the government cut it on 1 April 2020 and it remains at the current rate of 7.1 percent.
Used to get 12 percent interest
By the way, let us tell you that the interest rate of PPF used to be 12 percent. For the first time in the year 1985-86, this interest crossed 10 percent. Later in 1989-90, the rate of interest on PPF reached an all-time high of 12%. The trend of reducing the interest rate related to PPF happened in the government of former Prime Minister Atal Bihari Vajpayee.
English Headline : Is PPF still a good saving option, because interest rates are declining in last decade.
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