While the government increased the interest rates of certain small savings schemes, PPF interest rate had not changed. According to a circular issued by the Finance Ministry on September 29, the interest rates of three small savings schemes have been hiked by 10 bps to 30 bps for the October-December 2022 quarter (one percentage point is equal to 100 basis points). The interest rate of Citizen Savings Scheme has been increased by 20 bps to 7.6% and that of Kisan Vikas Patra by 1o bps to 7%. The interest rate of post office fixed deposits has been increased from 30 bps to 5.8% with tenure of 3 years and from 20 bps to 5.7% with tenure of 2 years.

As mentioned above the government has kept the interest rates on small savings schemes like PPF unchanged. That is, for the quarter ending December 31, 2022, an interest rate of 7.1% will be available on PPF.

Under the Public Provident Fund Scheme Act 1968, PPF account can be opened only by Indian citizens. However, an individual can register a single PPF account on behalf of each minor or disabled person over whom he has a guardianship. PPF account can be opened in a bank or post office.

Who cannot open PPF account

• PPF account cannot be opened in the name of HUF, Trust or NRI.
• However, a resident who subsequently changes his status to a non-resident Indian during the maturity period of the fund specified by the Public Provident Fund Scheme, can still contribute to the fund till maturity on a non-repatriation basis.
• Can an illiterate person open a PPF account?

according to PNB Frequently Asked Questions on PPF, “There is no bar on opening PPF account by an illiterate subscriber. For this purpose the thumb impression of the subscriber will be attested by a respected person of the Accounts Office/Bank. The procedure for opening a savings account by an illiterate depositor will be followed. Blind person will be treated as illiterate customer. The verification should be in the following words:- “The customer knows me and his thumb impression/imprint has been affixed in my presence.”

Minimum and Maximum Limit

The maximum investment that can be made in a financial year is Rs. 150000 and minimum investment Rs 500.

How is PPF interest calculated?

According to the PNB FAQ page on PPF, “For any month, investments made on or before the 5th of the month will be considered for interest calculation for that month. The interest will be calculated from the 5th of the month to the balance held till the end of the month.” The amount is reduced to Rs.1 lakh at the beginning of the month in an account for example by the account holder. invest 50,000 Rs. He did this on the 10th of the month. In this case, the balance on the 5th of the month was Rs 1 lakh and at the end of the month was Rs 1.5 lakh. Here, Rs 1 lakh is the amount which will be considered for calculation of interest. Additional investment of Rs 50,000 will be considered for the next month. If, however, the account holder had deposited an additional Rs 50,000 on the 3rd of the month, the balance as on the 5th of the month would be Rs 1.5 lakh. This would have been the amount considered for computing the interest for that month.”

When will the PPF account be closed

According to the India Post website, “If the minimum deposit of Rs 500/- is not made in any financial year, the said PPF account will be closed. The closed account can be revived by the depositor before the maturity of the account by depositing minimum subscription (ie Rs.500) + Rs. 50 s default fee for each defaulted year. Also there is no loan or withdrawal options will be available on the closed accounts.