The Public Provident Fund, often abbreviated as PPF, is one of the most sought after scheme for tax-saving. PPF can be a good choice of investment for retirement planning but a lot of people treat it as simply a tool to save tax. Until the department of accounts sends you a reminder to furnish documents of tax-saving, you do not think much about it.
PPF Interest Rate:
The PPF rate of interest is that is payable on the PPF balance is predetermined every year. In the last decade, it has been pragmatic that the rate of interest has varied however it has the chance to remain stable and was expected to fall slightly for the Union Budget of 2016. While the interest rate was 8.7 percent in fiscal year: 2015-2016 was slit to 8.1 percent in the fiscal year 2016-2017. The interest rates in some past years have been as under:
PPF Interest Rate: 2011 to 2017
The rate of Interest (p.a.)
December 1, 2011-March 31, 2012
April 1, 2012-March 31, 2013
April 1, 2013-March 31, 2014
April 1, 2014-March 31, 2015
April 1, 2015-March 31, 2016
April 1, 2016-March 31, 2017
How PPF Account Interest Rate Calculated?
You can calculate the interest rate on PPF on the least balance in the account between the 5th to the last day of each month. That’s why, in case you want to deposit a larger sum for any period of time of the year, you have to ensure that you vest on or prior to the 5th of a certain month, permitting yourself to produce interest for the whole of the month.
Advantages of PPF Account:
Here are a few key advantages of having a PPF account for you:
- If you make a deposit up to Rs. 1 lakh per annum in your PPF Account. The amount of money is liable to be exempted under Income Tax Act’s Section 80C. The contributions you make towards PPF account of your spouse or/and your children also the sum that qualifies for tax exemption under the Section 80C of the Income Tax Act.
- The deduction on tax is also massive up to the interest generated on the PPF account that means the full balance of your PPF account is absolutely exempted from the tax. This means that you do not have to pay any tax for return on investment in your PPF.
- The balance sum in a PPF account can’t be notified of any claim in case of any debt or even a liability. Therefore, the sum of money that belongs to you for life and is obtainable after your demise to your loved ones.
How to find your Existing PPF Interest Rate?
The current interest for a fiscal year, usually from April 1 of the year to March 31 of the upcoming year is similar. It is accessible online and does not vary throughout the whole of the year. On the other hand, the more imperative number that may be the existing balance on your PPF account is a more vital number. Here is what you need to do in order to check that:
- You can get hold of the bank or the post office branch to check the current PPF account’s status.
- If the bank is offering online banking, they can ask you to link your PPF account to your current online banking account. After getting merge, you can access the accounts and basic functions like making online payments for PPF loans and tracking the status of the account.
You should not get confused between Public Provident Fund (PPF) and Employees Provident Fund (EPF). The PPF and EPF are two different things. PPF is a personal saving account that an individual uses whose income has not been acquainted via a company or an organisation or anyone who is self-employed. Anyone already owning an EPF account can also make this savings investment account.
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