Several PPF account holders are hoping for an increase in interest rates.
New Delhi: Investors who have invested their savings in the Public Provident Fund (PPF) are eagerly waiting to get updates about any potential change in PPF interest rates. According to a report by Zee News, the Finance Ministry is set to conduct its quarterly review meeting of interest rates for small savings schemes, including the PPF by the end of this month. During this meeting, the interest rate matter will be discussed and it will accordingly be announced.
PPF Interest Rates remain Unchanged Since April 2020
Several PPF account holders are hoping for an increase in interest rates. However, as the interest rate on PPF has remained unchanged since April 2020, investors have been left with curiosity about the upcoming review meeting.
PPF One Of The Attractive Small Savings Schemes
It is interesting to note that PPF stands apart from other small savings schemes like SCSS and NSC due to its tax-free income status upon withdrawal. The post-tax income from a PPF account is still a favorable investment option among people.
What is significant about this scheme is the income tax benefits which makes it a favourite choice among investors. Despite an interest rate of 7.1%, the effective post-tax return from PPF can be as high as 10.32% for taxpayers in higher income tax brackets.
Will PPF Interest Rate Change This Time?
With the economic condition of the country, the prospect of an interest rate hike seems uncertain, several media reports citing expert comments have added. Taking the ongoing economic conditions into consideration, it seems likely that the status quo will prevail for small savings programs such as Senior Citizens Savings Scheme (SCSS) and National Savings Certificate (NSC) among many other small savings schemes.
An increase in interest rates of PPF looks possible and it is reasonable to assume that the Central government may opt to maintain the current rates to support fiscal responsibility and foster economic recovery, experts have commented.