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PPF interest rate 2025: What can Public Provident Fund account holders get?

Upstox
By Upstox News Desk

3 min read | Updated on January 01, 2025, 07:31 IST

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SUMMARY

The interest rate for the Public Provident Fund (PPF) scheme has remained unchanged at 7.1% for the last 19 quarters, starting from the first quarter of FY 2020-21. During this period, however, the government increased the interest rates of other small savings schemes

PPF interest rate 2025

PPF scheme enjoys the sovereign guarantee of the Government of India. Representational image

The Government of India has kept the interest rate of the Public Provident Fund (PPF) scheme unchanged for the last quarter of FY 2024-25. The current rate of 7.1% will remain effective from January 1, 2025, to March 31, 2025.

PPF account holders have expecting an upward revision in the interest rate for a long time. But this is unlikely to happen soon. A recent report by The Hindu suggested that investors of small savings schemes should brace for a rate cut in 2025.
The interest rate for the PPF scheme has remained unchanged at 7.1% for the last 19 quarters, starting from the first quarter of FY 2020-21. During this period, however, the government revised the interest rates of other small savings schemes like Senior Citizen Savings Scheme (SCSS), Sukanya Samriddhi Yojana (SSY), National Savings Certificates (NSC), Post Office Monthly Income Scheme (POMIS), Post Office Recurring Deposit, Kisan Vikas Patra (KVP) and Post Office Time Deposits.
Also read | Investments to income tax: 5 big personal finance trends of 2024 to know as 2025 begins

Why is PPF important?

Crores of Indians use the PPF scheme for tax-saving and investment purposes. As per the RBI Bulletin for December 2024, Indian households had assets worth over ₹10 lakh crore locked in PPF till March 2024, showing an increase of around 39% from June 2021.

PPF enjoys the exempt-exempt-exempt (E-E-E) status for taxation, which makes the effective yield from the scheme for taxpayers in the highest tax bracket much more than 7.1%. The scheme allows:

  • Deduction on deposits up to ₹1.5 lakh/year under section 80C
  • No tax on interest earned on deposits
  • No tax on the amount withdrawn on maturity

Moreover, the PPF scheme enjoys the sovereign guarantee of the Government of India, ensuring the full safety of deposits.

Also read | New PPF rules: Three major changes to Public Provident Fund rules from October 1

As per the Public Provident Fund Rules 2019, a person can have only one PPF account, i.e. one PPF account against a Permanent Account Number (PAN). An account holder can invest a minimum of ₹500 and a maximum ₹1.5 lakh/year in the PPF account.

The deposits can be made either at once or in multiple installments. But they should not exceed the maximum limit. Individuals are also allowed to deposit in the PPF accounts of their minor children. But the total deposits, including his own plus children's accounts, should not go beyond ₹1.5 lakh.

PPF interest rate in the past

The PPF interest rate in the first quarter of FY 2019-20 was 8%. In the last three quarters of FY 2019-20, PPF depositors earned 7.9% interest. Between the first quarter of FY 2016-17 and the last quarter of FY 2018-19, the PPF interest rate remained between 7.6% and 8.1%. The highest interest rate on PPF deposits was 8.8% during FY 2012-2013. Between 2013-2016, PPF depositors earned 8.7% interest.

About The Author

Upstox
Upstox News Desk is a team of journalists who passionately cover stock markets, economy, commodities, latest business trends, and personal finance.

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