For a long time, the government has not changed the return rates on this PPF savings plan. The government is planning to adjust the interest rates on this program till the end of June 2023. It is important to consider that the government reviews the interest rates on this savings plan after every three months.
It is worth noting that the Central Government last changed the interest rates of the Public Provident Fund Scheme in the year 2020. The government decided to lower the interest rates from 7.9 percent to 7.1 percent on April 1, 2022. This system has remained unchanged since April 1, 2022.
It is worth mentioning that the Central Government increased the interest rate on several modest savings programs in March 2023, but the PPF rate has remained unchanged at 7.1 percent. However, PPF account holders are hoping that by the end of June 2023, the government would consider raising interest rates.
According to several reports, the argument for not raising the PPF interest rates is that the total amount invested under this plan after-tax returns is 10.32%. In this case, this strategy is already outperforming other schemes. As a result, the government has not increased any interest rates in the long run.
The Public Provident Fund Scheme is a great tax-saving scheme that will help people to deduct Rs 1.5 lakh under Section 80C of the Income Tax Act. In addition, no tax would be levied on the interest earned on the sum deposited under this program.
You will not be taxed on the maturity amount of your PPF. This program has a 15-year lock-in duration. If you do not wish to engage in EPF or NPS programs, you may still obtain good returns on your retirement savings by investing in PPF.
The government raised the interest rate on various government-sponsored programs. Interest rates for the Senior Citizens Savings Scheme, Sukanya Samriddhi Yojana, Kisan Vikas Patra, Post Office FD Scheme (Post Office Fixed Deposits), Monthly Income Scheme, and Post Office RD Scheme (Post Office Recurring Deposit) were raised in the fourth quarter of the fiscal year 2022-23.