New Delhi: Public Provident Fund (PPF) will fetch an interest rate of 7.1 percent for the April-June quarter. Interest rates on small savings schemes has once again been unchanged by the government for April-June 2025 Quarter. The interest rates on these schemes ranging to PPF, Sukanya Samriddhi and NSC, has been kept on hold for the fifth straight quarter beginning April 1, 2025.
The interest rates for Public Provident Fund account are calculated between the fiscal year beginning 1st April to 31st March every year. Interest on PPF is calculated every month depending on the monthly balance that an individual has in his or her account between the 5th and the last day of every month. Hence, if you invest before April 5 i.e just at the beginning of a fiscal year, you will reap maximum interest on your Public Provident Fund.
Conversely, if you are a subscriber of Public Provident Fund, March 31 deadline is also equally significant for you. The Minimum Amount for opening of account and maximum balance that can be retained for PPF is the end of a financial year. Hence, it is mandatory that you deposit the minimum balance before the end of the financial year which is March 31.
Interest rates of these small savings scheme will remain unchanged for the first quarter of the next fiscal, beginning April 1, 2025, a notification issued by the finance ministry has said.
“The rates of interest on various Small Savings Schemes for the first quarter of FY 2025-26 starting from 1st April, 2025 and ending on 30th June, 2025 shall remain unchanged from those notified for the fourth quarter (1st January, 2025 to 31st March, 2025) of FY 2024-25,” said a finance ministry notification.
The interest rate on PPF has remained unchanged since April 2020. However, it is important to note that PPF stands apart from other small savings schemes like SCSS and NSC due to its tax-free income status upon withdrawal. This means that despite potentially lower returns compared to other schemes, the post-tax income from a PPF account can still be more favorable.
One of the key attractions of the PPF scheme lies in its tax benefits under section 80C of the Income Tax Act, making it a favored choice among investors. Even with an interest rate of 7.1%, the effective post-tax return from PPF can be over 10% for taxpayers in higher income tax brackets.
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