Government may give gift to investors of PPF and Sukanya Samriddhi Yojana today, interest rates may increase
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Rates have not changed for many years
Explain that the central government has not revised the interest rate of PPF since April 2020. It has remained at 7.1 per cent since then. Interest rates on several other small savings schemes including Senior Citizen Savings Scheme (SCSS), National Savings Certificate (NSC) and Sukanya Samriddhi Yojana have been hiked in the last two quarters. The Reserve Bank of India (RBI) had increased the repo rate by 2.5 per cent since May last year. In such a situation, investors are expecting that the government may increase the interest rate of one of the most used small savings schemes during the next review.
How is PPF interest rate calculated?
To know whether there will be an interest hike on PPF during the July-September quarter, you need to understand how the interest rate is calculated. Explain that the interest rates of small savings schemes are linked to the 10-year government yield in the secondary market. The central government reviews the interest rates of small savings schemes every quarter based on the government security yields of the last three months. This is in line with the recommendations of the Shyamala Gopinath Committee, 2011 to ensure that interest rates on small savings schemes are market linked.
PAN Aadhaar Card Link: Deadline to do these works ending in 4 days, settle them quickly, otherwise there will be lossWill PPF interest rate increase?
According to the data, the benchmark 10-year bond yield from March to May 2023 has averaged 7.3 per cent. As per the formula, the PPF interest rate will be 25 basis points higher than the average 10-year G-Sec yield of the respective maturity. So strictly following this process, the PPF rate should ideally be 7.55 per cent. However, according to experts, there is a gradual decline in benchmark yields, which casts doubt on the possibility of a PPF rate hike.
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