The government announced the interest rates for small savings plans for the quarter April-June 2024 and has decided to keep the rates of all schemes unchanged
The Public Provident Fund (PPF) is one of the most popular savings instruments. Note that only one PPF account can be maintained by an Individual, except an account that is opened on behalf of a minor
PPF is one of the few investment products that benefit from the triple tax exemption, often known as the exempt-exempt-exempt (EEE) designation. This implies that tax breaks are provided at the time of investment, accrual, and withdrawal.
The Indian government determines the interest rate on PPF, which is subject to change quarterly. As of the latest update in 2024, the PPF interest rate is 7.1% per year, compounded yearly for the April-June 2024 quarter.
Also read: What is the SCSS interest rate for the April- June 2024 quarter?
The PPF account tenure is 15 years and the lock-in period for the account is 15 years. PPF deposits range from Rs 500 up to Rs 1.5 lakh per financial year.
PPF taxation
Deposits to a PPF account are exempted from taxation up to a maximum of Rs 1.5 lakh in an FY under section 80C of the Income Tax Act, 1961.
Who can not open an account under PPF
PPF accounts cannot be opened in the names of HUF, Trusts, or NRI.
If a resident becomes a non-resident Indian within the Public Provident Fund Scheme’s maturity period, they can continue to subscribe until maturity on a non-repatriation basis.
What is the process for transferring my existing Public Provident Fund (PPF) account maintained with another bank/post office to SBI?
According to the government’s PPF system, subscribers can transfer their PPF account from one recognised bank or post office to another. In this instance, the PPF account will be treated as a continuous account. To allow consumers to transfer their current PPF accounts to SBI, the following steps must be taken.The customer approaches the bank or the Post office where his current PPF account is held and makes an application for transfer of PPF account to SBI’s branch.
Once the application is processed, the existing bank/Post office arrange to send the original documents such as a certified copy of the account, the account opening application, nomination form, specimen signature etc. to SBI branch address provided by the customer, along with a cheque/DD for the outstanding balance in the PPF account.
Can an NRI close their PPF account prematurely?
According to the ICICI Bank website, “As per the Public Provident Fund Scheme, 2019 issued by the Government of India, NRIs can prematurely close their PPF account only after five years from the account opening date. Once you change your residency status to an NRI and submit a copy of your passport, visa, or income tax return to your bank or post office where your PPF account is held, you can prematurely close your account if you wish to.
Please note, that for such premature closure, the interest credited will be 1% lower than the rate at which interest has been credited in the account from the date of account opening. Please get in touch with your bank for more details.”
