Public Provident Fund (PPF) has traditionally been the choice for long-term investors. The main drivers of this are tax exemption and risk-free, consistent returns. However, according to the statistics, many modifications have been made to PPF over the past ten years.
The PPF investment limit was raised as soon as the Modi government took office in 2014, which led to greater tax exemptions being made accessible. As a result, its interest rates have also been significantly reduced for the first time in a decade.
The interest rates on PPFs have been steadily declining since 2013. This is because the government raised the annual investment cap for PPF from 1 lakh to 1.5 lakh in 2014. However, since then, the interest rate has decreased from 8.8% to 7.1%. That means the interest rates on this plan have decreased by 1.7% in just ten years. According to the official statistics, the interest rate on PPF was 8.8% in 2013 but is presently only 7.1%.
Interest is decreasing year by year.
Regarding PPF interest, it was 8.7% overall from April 1, 2013, to March 31, 2014, with an Rs. 1 lakh investment cap. Following this, the investment limit was raised to Rs. 1.5 lakh from April 1, 2014, through March 31, 2016. However, the interest rate remained the same at 8.7%. Therefore, the PPF interest rate was reduced and dropped to 8.1% between April 2016 and September 2016.
Interest kept decreasing further.
After that, between October 2016 and March 2017, the PPF interest rate again dropped to 8%. This process persisted; by June 2017, its rate had decreased to 7.9%. The PPF interest rate had decreased to 7.8% by September. Then, it fell by a further 0.20 percent between January and September 2018. As a result, 7.6% less was charged in interest.
A big reduction in the Corona period.
Its interest rate increased between October 2018 and June 2019 and reached 8%, but it dropped again between July 2019 and March 2020, bringing the actual interest rate down to 7.9%. Then the Corona era began, during which the government's interest rate was lowered to 7.1 percent in April 2020 and is still maintained. However, the investor's upper limit remains at 1.5 lakh.