Home Personal Finance Public Provident Fund (PPF) Interest Rate July-September 2023: No change in PPF rate

Public Provident Fund (PPF) Interest Rate July-September 2023: No change in PPF rate

by TodayDigitNews@gmail.com
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Public Provident Fund (PPF) Rates July-September 2023: PPF rates for the July-September period of fiscal year 2023-24 were announced today (30 June). The Treasury has again left the PPF rate unchanged.

Previously, PPF account holders expected an increase as interest rates have remained unchanged since April 2020 (see PPF interest rate history).

The PPF interest rate for the April-June quarter of 2023-24 was 7.1%. This account allows investors to deposit up to Rs 1.5 lakh per annum and claim tax deductions under Section 80C of the Income Tax Act. Interest earned on PPF deposits and amounts withdrawn at maturity are also tax-free.

In the last two quarters, the government has increased interest rates on the Senior Citizens Savings Scheme (SCSS), National Savings Certificate (NSC), Sukanya Samridi Yojana (SSY) Account, Kisan Vikas Patra (KVP) and Post Office Savings Scheme. . Office Time Deposits, Post Office Monthly Income Scheme (POMIS) and Post Office Time Deposits (RD).

as Reserve Bank of India (RBI) has raised repo rates by 2.5 percentage points since May 2022, and depositors had hoped the PPF rate could rise further.

The interest rates of various post office petty savings schemes, including the PPF, are linked to the yield of 10-year government bonds (G-Secs). The Treasury Department reviews interest rates for small savings schemes such as the Public Provident Fund every quarter of the fiscal year. This review will be based on his G-Secs yields over the last three months as per the recommendations of the Shyamala Gopinath Commission in 2011. This exercise ensures that microsavings scheme interest rates are in line with the market.

G-Secs yield averaged 7.3% from March to June 2023. According to the formula adopted by the government to set the small savings interest rate calculation, the PPF rate should be 25 basis points higher than the average 10-year Gsec yield for the corresponding maturity.

However, G-Secs yields have been steadily declining, meaning PPF rates are very unlikely to rise. 10-year G-sex yields ranged from 7.3% to 7.5% in the January-March quarter. However, it gradually declined to 7-7.1% in the April-June period.

Interest rates on most microsavings plans are already comparable to long-term fixed deposits offered by banks. Moreover, given the RBI’s moratorium on repo rate hikes and declining inflation, experts believed there was not much room for an upward revision of the PPF rate.

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