A Guide To PPF Interest Rates

Anyone can start a PPF account with as little as Rs 500 and invest up to Rs 1.5 in the PPF account in a financial year. Whether you are a salaried person, running a small or big business, self-employed, a gig worker, a freelancer or doing any kind of job, you should look at PPF as an instrument that guarantees the safety of your hard-earned investment and gives back a healthy compounded annual returns.

You can use the PPF account to accumulate wealth over the long term. Individuals, who are not covered by Employees Provident Fund (EPF), can also utilise PPF as a long-term retirement planning option.

PPF Interest Rate 2022

The interest rate on PPF is revised by the Government on a quarterly basis. The current interest rate is 7.1%. The PPF interest rate for the first quarter of 2022 remains unchanged. (Check Details).

In the past, PPF deposits have earned higher interest, even up to 12%.

PPF Maturity, Closing/Withdrawal Rules

PPF account matures after the expiry of 15 years from the end of the financial year in which the account was opened. PPF account holders can extend their account in blocks of 5 years each after maturity.

Premature closing of PPF accounts before 15 years is generally not advised. However, you can close the PPF account prematurely after the completion of 5 years for specific purposes such as medical treatment, higher education of children etc.

From the 7th year, one withdrawal is allowed in a year. However, the maximum withdrawal can be 50% of the balance amount at the end of the fourth year or the immediately preceding year, whichever is lower.

PPF Interest Rate 2022 calculation: How to make the most of PPF?

The interest on PPF deposits is calculated on a monthly basis but credited to the account at the end of the financial year. The interest is calculated between the fifth and last day of a month. So to maximise returns, you should invest in a PPF account on or before the 5th day of a month. Doing this will fetch you interest on the current month’s balance apart from the previous months’ balance.

If you invest a lump sum in a PPF account in a year, then the ideal option for maximum returns would be to make the deposit between April 1 and April 5 of a financial year.

Conclusion

PPF enjoys legal immunity. The level of guarantee of your money in a PPF account is so much that it cannot be attached to pay off liabilities through a court order.

Also read - Public Provident Funds And Its Benefits

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.