Public Provident Fund/PPF Rate of Interest :
PPF or Public Provident Fund, a long term investment for the investors looking for secure investing options.You get a fixed rate of interest on the amount invested and you enjoy tax benefits as well.
PPF Rate of Interest is decided by the Government of India and revisions are made on timely basis. PPF amount yields a fixed rate of interest. PPF Interest for the first 2 quarters of F.Y.2016-17 was 8.1% p.a.
PPF interest rate has been further lowered by 0.1 percent for 3rd Quarter of F.Y.2016-17. So,PPF interest rate for 3rd Quarter of F.Y.2016-17 has been reduced to 8 % per annum.
How Interest is calculated on PPF or Public Provident Fund ?
The PPF or Public Provident Fund interest is compounded annually.But,the calculation of interest is done on monthly basis and the same is credited at year end.Interest is calculated on the lower of the balance held on the 5th of a month to the end of that particular month.
Key Features of Opening a Public Provident Fund or PPF Account :
- PPF is a long term investment option with a lockin period of 15 years.Premature withdrawal is allowed subject to specific conditions only.
- Minimum annual investment required is Rs.500.
- Maximum annual investment can be upto Rs.1.5 lakhs only.
- PPF Interest rate for first half of F.Y.2016-17 was 8.1% which has been reduced to 8% for the 3rd quarter.
- Only one PPF Account is allowed per person.You can open PPF Account in the name of a minor, that shall be handled by his/her guardian.
- You get an Income Tax Deduction under section 80C of The Income Tax Act for the amount contributed towards PPF upto Rs.1.5 lakhs during a financial year.
- The PPF interest earned and PPF maturity amount are also tax free,that is the main reason why investors are attracted towards this long term investment option.
For a detailed analysis on PPF you can refer our blog post : PPF Account,PPF Interest rate,PPF Rules,PPF Calculator – The Ultimate guide !
For calculating your PPF maturity amount, you can use the following PPF Calculator that will help you calculate your Principal and PPF Interest amount based on few assumptions :