The Public Provident Fund (PPF) remains a trusted investment option for millions of Indians seeking long-term financial security. Known for its attractive interest rates and tax benefits, the PPF is an ideal savings tool for individuals looking for risk-free returns. Whether you’re saving for retirement or your child’s education, the PPF is a reliable option to achieve your long-term goals. In a press release issued on December 31, 2024, the Department of Economic Affairs, under the Finance Ministry, stated, “The rate of interest on various Small Savings Schemes for the fourth quarter of FY 2024-25 starting from 1st January, 2025 and ending on 31st March, 2025 shall remain unchanged from those notified for the third quarter (1st October, 2024 to 31st December, 2024) of FY 2024-25.”
As we step into 2025, let’s explore the current interest rate, eligibility, benefits, and key features of the PPF scheme:
PPF Interest Rate 2025
The government reviews the interest rates for small savings schemes every quarter. For the period from January to March 2025, the interest rates will remain the same as before.
For the quarter ending March 2025, the government has maintained the PPF interest rate at7.1% per annum. This rate is compounded annually and credited to the account at the end of the financial year. PPF interest rate is regulated by the Ministry of Finance, the Government of India, ensuring alignment with prevailing economic conditions.
Eligibility For PPF Account
Here’s who can open a PPF account, as per the Central Bank of India (CBI):
i) a single adult by a resident Indian.
ii) a guardian on behalf of a minor/ person of unsound mind.
Benefits of Investing In PPF
i) Tax Benefits: Contributions to a PPF account qualify for deductions under Section 80C of the Income Tax Act, up to a maximum of ₹1.5 lakh per year. Additionally, the interest earned and maturity amount are completely tax-free, offering a triple tax-exempt benefit.
ii) Risk-Free Returns: Backed by the Government of India, PPF ensures guaranteed returns, making it a safe investment choice.
iii) Long-Term Wealth Creation: With a lock-in period of 15 years and options to extend in blocks of 5 years, PPF is ideal for building retirement wealth.
iv) Withdrawals: There is no tax on the amount you receive when your account matures or when you make withdrawals.
Salient Features of PPF
Here are some of the features of PPF:
i) The minimum deposit required is Rs 500 annually, while the maximum limit is Rs 1.5 lakh per financial year.
ii) Investments in PPF are locked in for 15 years, promoting disciplined long-term savings.
iii) PPF follows the Exempt-Exempt-Exempt (EEE) tax regime.
iv) The interest rate is set by the Government of India and is paid quarterly.
v) The interest earned and maturity proceeds are tax-free.
vi) A nominee can be designated for the account at the time of opening or later.
How To Open A PPF Account
Opening a PPF account is an easy process. It can be done at post offices or authorised banks, either online or offline. All you need is a valid ID proof, address proof, and a recent passport-sized photograph.
As 2025 begins, maintaining a disciplined investment habit in PPF can help secure your financial future.
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