What is the latest PPF rate? What are the historical rates for PPF?
This article gives you the current and historical interest rates for PPF so that you can decide if investing in PPF is the right option for your portfolio.
This article gives you the current and historical interest rates for PPF so that you can decide if investing in PPF is the right option for your portfolio.
As per Wikipedia, the Public Provident Fund (PPF) is a savings-cum-tax-saving instrument in India introduced by the National Savings Institute of the Ministry of Finance in 1968. PPF allows you to save small sums of money, and offers a guaranteed interest rate and tax benefits that make it attractive for many conservative investors.
PPF is a fantastic debt instrument which has guaranteed return (though it has fallen over time) but it is still higher than the market rate in other options. Since there is a 15 years lock-in (which can be extended in blocks of 5 years) and to keep the account active you need only ā¹500/year, open it and keep it active. Later when you need to invest more amount in long-term debt investments, both the maturity of PPF will be closer and you will have many options like debt mutual funds. You can open PPF in your own name plus in the name of your parents if they donāt have one already. When you get married and have children, you repeat this for your spouse and children.
PPF is an EEE-class instrument which means that it is exempt from tax on investment up to 1.5 lakhs/year under 80C, exempt from taxation during growth and there is a full exemption on taxes at maturity.
Join our WhatsApp community: You can stay updated on our latest content and learn about our webinars. Our community is fully private so that no one, other than the admin, can see your name or number. Also, we will not spam you.The latest PPF rate is 7.1%
Using data from National Savings Institute, we plot the historical interest rates and limits of PPF investment since 1968.
Some observations:
In the sections below we will cover a few commonly asked questions on PPF.
Our analysis using SENSEX data from 1979 shows that stock investing in SIP form over a 15-year horizon has given better returns than investing in PPF.
Read more: PPF vs. mutual funds: which is better?
If your college admission date is 15 years or more away, then a PPF account can be used. However, the returns from PPF are below the usual college fee inflation of 10% (or more), you need equity mutual funds as well to ensure that you meet your goal.
Read more: What is the best way to invest for your childās college education?
For long-term goals, PPF is a good option. For goals that are more than 15 years away, the typical asset allocation, i.e. mix of equity and debt in the portfolio, should be around 60:40. This means that your monthly investment should also follow the same 60:40 rule. As long as you are investing at least enough in equity as per the asset allocation, the rest can be in PPF and other debt investment options.
Read more: What should be my mix of MF, Stocks, Gold, NPS, FD, PPF and ELSS if I want to invest 50k per month?
We have an extensive list of questions on PPF here: Frequently asked questions on Public Provident fund (PPF): the complete guide.
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This post titled What is the latest PPF rate? What are the historical rates for PPF? first appeared on 30 Jan 2023 at https://arthgyaan.com