The interest rates on popular small savings schemes such as Public Provident Fund (PPF) remain the same as those in the previous quarter.
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The central government has maintained the status quo on interest rates for small savings schemes, as it will not revise them. As per a notification by the Department of Economic Affairs (DEA) dated March 28, 2025, the interest rates on popular small savings schemes such as Public Provident Fund (PPF) remain the same as those in the previous quarter. PPF will continue to pay the same interest rate during the April-June period as it did during the last quarter of FY25.
The interest rate for PPF stands at 7.1%. As the government has not revised interest rates on the small savings scheme, the investors will continue to receive the same returns as they did in the previous quarter.
The interest rate on small savings schemes such as PPF is reviewed at the end of every quarter by the Department of Economic Affairs.
Any resident individual can open an account for themselves and on behalf of a minor or a person of unsound mind as a guardian. A person can invest a minimum of Rs 500 and a maximum of Rs 1.5 lakh every fiscal year in the PPF account. In the old tax regime, investors can claim up to Rs 1.5 lakh deduction in taxable income in a fiscal year.
The PPF comes with a lock-in period of 15 years. Depositors can choose to opt for 5-year extensions under the scheme. During the extension period, investors are allowed yearly withdrawals. The extension has to be within one year of maturity. Investors must deposit at least once every year for the first 15 years into a PPF account, as well as during the extensions, to be able to earn yearly income during the extended period.
PPF members are allowed one withdrawal per fiscal year after the first five years, excluding the year of account opening. Members can withdraw up to 50 per cent of the balance at the end of the 4th preceding year or at the end of the preceding year, whichever is lower. Members are allowed one withdrawal every financial year, subject to a maximum of 60 per cent of the balance in extended accounts with deposits. Premature closure of the account is allowed under certain conditions.
According to calculations, at the current interest rate of 7.1 per cent compounded annually, if members invest Rs 1.5 lakh per year in the PPF account for its full maturity period of 15 years (total investment Rs 22.5 lakh), the maturity amount after 15 years will be approximately Rs 40.68 lakh (including interest of Rs 18.18 lakh).
If members extend their account for five years, which will take the total period of investment to 20 years, the total corpus will be Rs 66.58 lakh (with investment totalling Rs 30 lakh and the interest earned Rs 36.58 lakh). So, the total corpus will be about Rs 66.58 lakh in 20 years.
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