PPF interest rate: Currently the interest rate on EPF is 8.5 percent and the interest rate on PPF is 7.1 percent.
PPF has a lower interest rate than EPF.
The SBI Economic Research team, headed by Dr Soumya Kant Ghosh, has advised the government to bring equality between the Employee Provident Fund ie EPF and Public Provident Fund PPF. PPF is like a retirement fund for self-employed people, although it offers a lower interest rate than EPF.
These economists say that the government needs to keep the interest rate equal in the interest of social security. Apart from this, it has been suggested to remove the lock-in period of 15 years. SBI Economist suggests that by applying some penalty, investors should get the facility to get out of it. Currently, the interest rate on EPF is 8.5 percent and the interest rate on PPF is 7.1 percent. If SBI Economist’s advice is accepted, then PPF investors will get 1.4% more interest.
Interest calculation on quarterly basis
The government guarantees the money of investors in PPF. It is a long term small saving scheme aimed at giving retirement security to self-employed people. The calculation of interest on PPF is done on a quarterly basis. Currently, the interest rate on this is 7.1 percent. The interest rate on EPF for the financial year 2020-21 is 8.5 per cent. The economist recommends that the government keep parity in the interest rates of EPF and PPF.
PPF is tax free
The year 2019 Modi government implemented Public Provident Fund Scheme 2019. PPF is a safe investment option. You can open PPF account in post office or bank. There is a benefit of tax deduction on investment. Apart from this, the amount of maturity and income of interest is also tax free. Its most important thing is that the amount deposited in PPF account cannot be seized under any court order.
Special features of PPF account
> After completion of 15 years after opening PPF account, even after maturity, you will be able to deposit money in PPF for the next five years.
>> The interest rate of PPF is determined by the Government of India every three months.
>> In a financial year, you cannot invest less than 500 rupees and more than 1.50 lakh rupees in this scheme.
>> An investment of Rs 500 in a PPF account is compulsory. If the account holder does not deposit a minimum amount of Rs 500 during the year, then this account will be closed.
>> At the end of every year, the amount of interest is deposited in the account of the account holder. Currently, the PPF scheme has an interest rate of 7.1 per cent per annum.
>> The amount deposited in PPF account can be withdrawn anytime after 5 years of opening the account.
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