PPF, Sukanya Samriddhi Account interest rate hike may remain elusive
The Hindu
Investors in the popular small saving schemes Public Provident Fund (PPF) and Sukanya Samriddhi Account (SSA), whose rates have not been hiked since January 2019, are unlikely to get higher returns anytime soon, a top government official has indicated.
Investors in the popular small saving schemes Public Provident Fund (PPF) and Sukanya Samriddhi Account (SSA), whose rates have not been hiked since January 2019, are unlikely to get higher returns anytime soon, a top government official has indicated.
This is because the government is no longer in complete agreement with the Shyamala Gopinath Committee formula that was adopted in April 2016 to reset small savings rates every quarter in line with the prevailing yields on government bonds of comparable tenures.
The last time the PPF and SSA rates were tweaked was when they were slashed sharply in April 2020 along with the returns on other small savings schemes.
At the time, the PPF rate was brought down to 7.1% from 7.9%, while the SSA’s returns were pared to 7.6%.
The returns of these two schemes have remained static even as rates on some other small savings instruments were hiked for the third and fourth quarters of 2022-23.
“We disagree with the Shyamala Gopinath Committee’s formula in respect of those items where tax advantage is the main consideration,” a senior Finance Ministry official told The Hindu, stressing that incomes from both the PPF and the SSA are tax-free.