Public Provident Fund (PPF) Interest Rate July-September 2023: Will Finance Ministry hike rate?

financialexpress.com:

Public Provident Fund (PPF) Interest Rate July-September 2023: The PPF interest rate for the July-September quarter of FY 2023-24 will be announced today (June 30). PPF account holders are expecting a hike in the interest rate as it has remained unchanged since April 2020 (See PPF interest rate history).

In the April-June quarter of FY 2023-24, the PPF interest rate was 7.1%. The account allows investors to deposit up to Rs 1.5 lakh in a year and claim tax deductions under Section 80C of the Income Tax Act. The interest earned from PPF deposits and the amount withdrawn on maturity are also tax-free.

In the last two quarters, the Government has increased interest rates for Senior Citizen Savings Scheme (SCSS), National Savings Certificate (NSC), Sukanya Samriddhi Yojana (SSY) account, Kisan Vikas Patra (KVP), and Post Office deposit schemes like Post Office Time Deposit, Post Office Monthly Income Scheme (POMIS) and Post Office Recurring Deposit (RD).

As the Reserve Bank of India (RBI) has increased the repo rate by 2.5% since May 2022, depositors are hoping that the PPF interest rate may be increased further.

To understand, whether the PPF interest rate will go up or not, it is important to understand how the interest rates of various small savings schemes are decided.

The interest rates of various post office small savings schemes, including PPF, are linked to yields of 10-year Government Securities (G-Secs). The Finance Ministry reviews the interest rates of small savings schemes like the Public Provident Fund every quarter of a financial year. The review is done basis G-Secs yields of the previous three months, as per recommendations of the Shyamala Gopinath Committee, 2011. This exercise ensures the interest rates