Will government revise PPF interest rate in June 2023? Check details here
The quarterly revision of interest rates of small savings schemes is due this month.
The Public Provident Fund is a popular long-term savings scheme offered by the Central government. It provides individuals with a safe and reliable avenue to save and grow their money to build a corpus fund in the long run. All eyes are now on the Centre as the quarterly interest rate revision for the small savings scheme is due this month.
The small savings schemes include the Sukanya Samriddhi Yojana (SSY), Senior Citizen Savings Scheme (SCSS), National Savings and PPF.
In the last quarterly review in April, the government kept the PPF interest rate unchanged at 7.1 per cent.
With investors eagerly awaiting the government’s announcement about the small savings schemes, many are hopeful that the interest could be hiked this time as the PPF interest rate has remained unchanged since April 2020.
The PPF interest rate has not been changed by the Centre since April 2020, when it was reduced from 7.9 per cent to 7.1 per cent.
The nation has been experiencing steady economic growth, boosted by industrial production and a favourable GDP trajectory. On the other hand, interest rates for different small savings schemes were increased in the last revision announced in April 2023. Under these circumstances the government’s decision on the PPF interest rate may change in the upcoming quarterly review.
However, the decision to increase the PPF interest rate is not solely dependent on these favourable factors. The government also needs to consider the prevailing fiscal situation, the cost of borrowing, and the impact on the overall economy.
While there is a possibility of an interest rate increase, the magnitude of the hike remains uncertain. A cautious approach from the government may lead to a conservative revision, possibly within a narrow range above the existing 7.1 per cent mark.
The revision of the PPF interest rate this month holds the promise of providing increased returns for investors. While the precise rate remains uncertain, the prevailing economic conditions and inflationary pressures indicate a possible upward adjustment.
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