PPF interest rates may fall again. How rates have changed over 50 years
By this month-end, the government will fix interest rates for small savings schemes including PPF or Public Provident Fund for the next July-September quarter. And in all likelihood, we may see another cut in small savings rates amid an overall drop in interest rates in the financial system. The government had cut interest rates on small savings schemes for the April-June quarter by up to 140 basis points. The interest rate on popular small savings scheme PPF was cut by 80 basis points to 7.1%.
The PPF scheme was launched in 1968 and at that time it fetched an annual interest rate of 4.8% Thereafter, interest rates went up gradually, depending on the interest rate in the financial system, peaking at 12% in 1986-2000. Since April 2016, the government has been revising interest rates PPF account on a quarterly basis. Prior to that, PPF interest rates were revised once a year.
If PPF interest rate for July-September quarter is cut below 7%, it would be lowest since 1974.
Here is the interest rate offered on PPF over the years:
Year PPF Rate of interest (p.a.)
1968 4.8%
1969-70 4.8%
1970-71 5%
1971-72 5%
1972-73 5%
1973-74 5.3%
From 1.4.1974 to 31.7.1974 5.8%
From 1.8.1974 to 31.3. 1975 7%
1975-76 7%
1976-77 7%
1977-78 7.5%
1978-79 7.5%
1979-80 7.5%
1980-81 8%
1981-82 8.5%
1982-83 8.5%
1983-84 9%
1984-85 9.5%
1985-86 10%
From 1.4.1986 to 31.3.1999 12%
From 1.4.1999 to 14.1.2000 12%
From 15.1.2000 to 28.2.2001 11%
From 1.3.2001 to 28.2.2002 9.5%
From 1.3.2002 to 28.2.2003 9%
From 1.3.2003 to 30.11.2011 8%
From 1.12.2011 to 31.3.12 8.60%
From 1.04.2012 to 31.3.2013 8.80%
From 1.04.2013 to 31.03.2016 8.7%
It is to be noted that the government had allowed Public Provident Fund (PPF) holders a three-month extension to make deposits for FY 2019-20 till June 30, 2020. This is subject to maximum deposit ceiling of ₹1.5 lakh for FY 2019-20. PPF account holders can make the deposit till June 30 and no penalty/revival fee will be charged. This will also be applicable for other small savings schemes.