Latest PPF interest rate: Was Public Provident Fund interest rate hiked for Oct-Dec quarter?

The government has published the small savings scheme interest rates for the October-December 2023 quarter. The government raised the interest rate on just one small savings scheme for the quarter ending December 31, 2023. All schemes' interest rates, with the exception of the recurring deposit rate, have remained unaltered.

Also read: PPF, Sukanya Samriddhi, SCSS, NSC interest rates for December 2023 quarter announced; check here

PPF interest rate for Oct-Dec quarter 2023

Which means, the interest rate on Public Provident Fund (PPF) is unchanged at 7.1%. The Public Provident Fund (PPF) is a popular long-term investing scheme backed by the Indian government. It offers security in the form of attractive interest rates and tax-free returns.

Formula for PPF interest rate

As per the formula notified by the Ministry of Finance in 2016, the PPF has a spread of 25 basis points over the benchmark yield. The benchmark 10-year bond yield has averaged 7.14% from June to August 2023, according to data from Investing.com. Going by this formula, the PPF interest rate should be 25 basis points higher than the average 10-year G-sec yield of the corresponding maturity. So going strictly by this formula, the PPF rate should ideally be 7.39%. However, the government has yet again not raised the PPF rate despite the formula suggesting a higher rate even in previous quarters.

PAN- Aadhaar mandatory

The Finance Ministry has made PAN and Aadhaar IDs mandatory for investments in post office schemes such as the Public Provident Fund (PPF). The government issued a notification in this regard on March 31, 2023. Previously, investors could invest without giving their Aadhaar number. To participate in a small savings initiative, you must now have an Aadhaar enrollment slip or number.

Who cannot open PPF account
HUF and Non Resident Indians are not eligible to open PPF account.

PPF tax benefit
The Income Tax Act's Section 88 provides tax benefits to PPF accounts. The entire taxation of interest income is also prohibited. Wealth tax is completely waived on any balance due on a PPF account.

Death of the subscriber
Once the relevant paperwork has been submitted, the subscriber's nominee or legal heirs will receive the remaining balance in their PPF account.

How to open PPF online in SBI

Here is a step-by-step guide to open an SBI PPF account using Netbanking facility.

Step 1: Log in to the SBI portal at www.onlinesbi.com using your credentials.
Step 2: Under Click on 'Request and enquiries' tab from the top right corner
Step 3: Select 'New PPF Accounts' from the drop-down menu.
Step 4: Displays "New PPF Account" page. The name, address, CIF number, and PAN of the customer will be displayed.
Step 5: If you are opening the account on behalf of a minor, tick the box.
Step 6: Enter your home branch's bank branch code and branch name. In addition, you may provide up to five nominee details based on your preference.
Step 7: Click the 'Submit' button.
Step 8: Once you have double-checked all of the information, click 'Proceed.'
Step 9: Your form has been successfully submitted,' will display in a dialogue box. There will also be a reference number on it.
Step 10: Download the form with the assigned reference number.
Step 11: Print the account opening form from the 'Print PPF Online Application' button.
Submit the form to the branch with your KYC documents and a photograph within 30 days.

When the application is submitted, a reference number for Form A is generated. The assigned reference number will be valid for 30 days from the date of submission before being erased. So, you must print the account opening form from the 'Print PPF Online Application' link within 30 days and visit the bank with KYC documents and a photograph.