PPF interest rate reduced to 7.9%

The government of India has reduced the interest rate of PPF (Public Provident Fund) to 7.9%, a 40 year low for the government-managed provident fund scheme.

ppf-rate-decline With long-term bank fixed deposit rates already down to 6.5% to 6.75%, there aren’t a whole lot of safe investment opportunities left for the small investors. And even though the market is at a high and giving a handsome return, it is anybody’s guess, how long the bull run will continue.

Plus for a truly long-term investment, there are few investment instruments as good as the PPF. Especially since the returns are not only tax-free, but you also get tax benefits under 80c while investing in the scheme.

For the salaried class, switching to EPF, which has a higher return of 8.65% remains an option.

However, those who are self-employed, like this poor blogger, have no option but to continue investing in PPF and pray to the God, that the government wouldn’t reduce the PPF interest rates any further.

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