Public Provident Fund deposits jump 134% in 9 years: 5 features that make PPF attractive

PPF Deposit 2022 (features & benefits): Net deposits under Public Provident Fund (PPF) scheme jumped around 134% between 2013-14 and 2021-22,

Public Provident Fund deposits jump 134% in 9 years: 5 features that make PPF attractive
PPF interest rate has been generally higher than bank Fixed Deposits. Representative image

PPF Deposit 2022: Net deposits under Public Provident Fund (PPF) scheme jumped around 134% between 2013-14 and 2021-22, according to Government data. The total net deposit under this popular small savings scheme in post offices in 2013-14 was Rs 5487.43 crores. It increased to Rs 12,846 crores by 2021-22.

Small savings schemes provide attractive interest rates to depositors. The interest rates on these schemes are revised every quarter. For the last few quarters, small savings scheme rates have remained unchanged.

“Interest rate on small saving schemes are periodically reviewed by the Government based on well laid principles and accordingly, the interest rates are fixed,” Union Minister of State for Finance Pankaj Chaudhary said in a written reply to a query in the Lok Sabha on Monday (25th July).

YearGross Deposit (in crores)Net Deposit (in crores)
2013-148,135.005,487.43
2014-159,756.846,139.91
2015-169,622.484,855.95
2016-1710,393.235,758.40
2017-1810,486.846,007.00
2018-1913,566.488,539.75
2019-2018,881.6213,012.98
2020-2120,455.7613,689.99
2021-2221,302.8112,846.03
Source: Department of Posts data shared by Union Minister of State for Finance Pankaj Chaudhary in Lok Sabha on 25-07-2022

5 features that make PPF attractive

PPF is one of the most popular investments and tax-saving schemes for depositors. It offers multiple benefits.

High-Interest Rate: PPF interest rate has been generally higher than bank Fixed Deposits. Currently, the interest on PPF deposits is 7.1%, which is compounded annually. The benefit of compounding enables depositors to accumulate a large corpus over the years.

Tax Benefits: Deposits under PPF scheme qualify for tax deduction under Section 80C. One can make a maximum deposit of Rs 1.5 lakh in a year in a PPF account. The interest earned on PPF deposits over the years and the amount received on maturity is also tax-free.

Loan Benefit: PPF account holders can take loans against their deposits after the expiry of one year from the end of the financial year in which the initial subscription was made. For example, if you open a PPF account in FY 2022-23, you can take a loan against your deposits in FY 2024-25.

Sovereign guarantee: There is a sovereign guarantee on PPF deposits. This means, that even if a bank or a post office in which you have opened a PPF account fails, your money will remain safe as it is guaranteed by the government itself.

Freedom from attachment: An order or a decree of a court cannot attach a PPF account in case of any debt or liability incurred by an individual. PPF account is always protected and the account balance cannot be attached by the court order.

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