Home / Money / Personal Finance /  When PPF account offered interest rates of 4.8% and 12%

Since its launch in 1st July 1968, PPF or Public Provident Fund has remained one of the most popular small savings schemes. When the scheme was launched in 1968, PPF offered an interest rate of 4.8% which remained the same in 1969-70. Thereafter, interest rates went up gradually, depending on the interest rate in the financial system, peaking at 12% in 1986-2000. After that PPF interest rates showed a declining trend. Since April 2016, the government has been revising interest rates of small savings schemes, including PPF, on a quarterly basis.

Prior to that, PPF interest rates were revised once a year. For the latest quarter of October to December, the government kept interest rate on PPF unchanged at 7.9% (annual).

Year PPF Rate of interest (p.a.)

1968 4.8%

1969-70 4.8%

1970-71 5%

1971-72 5%

1972-73 5%

1973-74 5.3%

From 1.4.1974 to 31.7.1974 5.8%

From 1.8.1974 to 31.3. 1975 7%

1975-76 7%

1976-77 7%

1977-78 7.5%

1978-79 7.5%

1979-80 7.5%

1980-81 8%

1981-82 8.5%

1982-83 8.5%

1983-84 9%

1984-85 9.5%

1985-86 10%

From 1.4.1986 to 31.3.1999 12%

From 1.4.1999 to 14.1.2000 12%

From 15.1.2000 to 28.2.2001 11%

From 1.3.2001 to 28.2.2002 9.5%

From 1.3.2002 to 28.2.2003 9%

From 1.3.2003 to 30.11.2011 8%

From 1.12.2011 to 31.3.12 8.60%

From 1.04.2012 to 31.3.2013 8.80%

From 1.04.2013 to 31.03.2016 8.7%

(Source: National Savings Institute)

Here are 10 things to know about PPF scheme

1) A minimum of 500 and maximum of 1.5 lakh can be deposited in a PPF account per year.

2) The amount can be deposited in lump sum or in a maximum of 12 installments per year.

3) Individuals in their own name as well as on behalf of a minor can open a PPF account. But if the guardian already has a PPF account in his/her name, the maximum amount that can be deposited in the guardian/parent account, including child’s account, is 1.5 lakh per year.

4) PPF accounts have a tenor of 15 years but thereafter it can be extended for blocks of five years each.

5) PPF accounts can be closed prematurely under special situations after five years.

6) Interest in PPF account is calculated on the minimum balance between 5th day and end of the month and is paid on 31st March every year.

7) Loan facility is available to a depositor from the financial year in which the PPF account was opened.

8) Partial withdrawals are allowed once every year from seventh financial year.

9) Interest income from PPF is totally tax free.

10) Contributions up to 1.5 lakh in PPF account qualify for a tax deduction under Section 80C of the Income Tax Act. On maturity, the proceeds from PPF are tax-free.

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