For the first time in decades, the Public Provident Fund (PPF) rate could dip below 7%. The 10-year government bond yield has averaged 6.30% since the beginning of the April-June 2025 quarter. The Gopinath Committee formula for small savings schemes pegs the PPF rate 25 basis points above the average 10-year g-sec yield in the preceding quarter. If the formula is followed strictly, the PPF rate for the July-Sept quarter would be 6.55%.If the PPF rate falls below 7%, it will be a 50-year low.
| Period |
PPF Interest Rate (%) |
| 1968–1969 to 1969–1970 |
4.8 |
| 1970–1971 to 1972–1973 |
5 |
| 1973–1974 to 1974–1975 |
5.3 |
| 1975–1976 to 1976–1977 |
7 |
| 1977–1978 to 1979–1980 |
7.5 |
| 1980–1981 to 1982–1983 |
8 |
| 1983–1984 to 1985–1986 |
9 |
| 1986–1987 to 1998–1999 |
12 |
| 1999–2000 |
11 |
| 2000–2001 |
11.00 to 9.50 (cut in Jan 2001) |
| 2001–2002 to 2002–2003 |
9 |
| 2003–2004 |
8 |
| 2004–2005 to 2010–2011 |
8 |
| 2011–2012 |
8.6 |
| 2012–2013 |
8.8 |
| 2013–2014 |
8.7 |
| 2014–2015 |
8.7 |
| 2015–2016 |
8.7 |
| Apr 2016 – Jun 2016 |
8.1 |
| Jul 2016 – Mar 2017 |
8 |
| Apr 2017 – Jun 2017 |
7.9 |
| Jul 2017 – Dec 2017 |
7.8 |
| Jan 2018 – Sep 2018 |
7.6 |
| Oct 2018 – Jun 2019 |
8 |
| Jul 2019 – Mar 2020 |
7.9 |
| Apr 2020 till now |
7.1 |
| July 2025 onwards |
To be announced |
But keep in mind that the formula recommended by the Gopinath Committee is only indicative, not binding on the government. In the past, the actual PPF rate has deviated from the one derived by the formula. For instance, in 2016 and 2017, 10-year g-sec yields fell to 6.5% levels but the PPF rate remained steady at 7.8%. Then again, in 2018, g-sec yields shot up to nearly 8% but the PPF rate was reduced to 7.6%.
| Quarter |
Avg 10-year bond yield (%) |
Rate as per formula (%) |
Actual PPF rate (%) |
Difference (BPS) |
| Apr-Jun 2016 |
7.46 |
7.71 |
8.1 |
39 |
| Jul-Sep 2016 |
7.15 |
7.40 |
8 |
60 |
| Oct-Dec 2016 |
6.60 |
6.85 |
8 |
115 |
| Jan-Mar 2017 |
6.66 |
6.91 |
8 |
109 |
| Apr-Jun 2017 |
6.73 |
6.98 |
7.9 |
92 |
| Jul-Sep 2017 |
6.52 |
6.77 |
7.8 |
103 |
| Oct-Dec 2017 |
6.97 |
7.22 |
7.8 |
58 |
| Jan-Mar 2018 |
7.53 |
7.78 |
7.6 |
-18 |
| Apr-Jun 2018 |
7.73 |
7.98 |
7.6 |
-38 |
| Jul-Sep 2018 |
7.90 |
8.15 |
7.6 |
-55 |
| Oct-Dec 2018 |
7.70 |
7.95 |
8 |
5 |
| Jan-Mar 2019 |
7.52 |
7.77 |
8 |
23 |
| Apr-Jun 2019 |
7.21 |
7.46 |
8 |
54 |
| Jul-Sep 2019 |
6.56 |
6.81 |
7.9 |
109 |
| Oct-Dec 2019 |
6.60 |
6.85 |
7.9 |
105 |
| Jan-Mar 2020 |
6.42 |
6.67 |
7.9 |
123 |
| Apr-Jun 2020 |
6.05 |
6.30 |
7.1 |
80 |
| Jul-Sep 2020 |
5.93 |
6.18 |
7.1 |
92 |
| Oct-Dec 2020 |
5.92 |
6.17 |
7.1 |
93 |
| Jan-Mar 2021 |
6.07 |
6.32 |
7.1 |
78 |
| Apr-Jun 2021 |
6.02 |
6.27 |
7.1 |
83 |
| Jul-Sep 2021 |
6.18 |
6.43 |
7.1 |
67 |
| Oct-Dec 2021 |
6.36 |
6.61 |
7.1 |
49 |
| Jan-Mar 2022 |
6.73 |
6.98 |
7.1 |
12 |
| Apr-Jun 2022 |
7.32 |
7.57 |
7.1 |
-47 |
| Jul-Sep 2022 |
7.30 |
7.55 |
7.1 |
-45 |
| Oct-Dec 2022 |
7.35 |
7.60 |
7.1 |
-50 |
| Jan-Mar 2023 |
7.35 |
7.60 |
7.1 |
-50 |
| Apr-Jun 2023 |
7.07 |
7.32 |
7.1 |
-22 |
| Jul-Sep 2023 |
7.16 |
7.41 |
7.1 |
-31 |
| Oct-Dec 2023 |
7.27 |
7.52 |
7.1 |
-42 |
| Jan-Mar 2024 |
7.11 |
7.36 |
7.1 |
-26 |
| Apr-Jun 2024 |
7.08 |
7.33 |
7.1 |
-23 |
| Jul-Sep 2024 |
6.88 |
7.13 |
7.1 |
-3 |
| Oct-Dec 2024 |
6.79 |
7.04 |
7.1 |
6 |
| Jan-Mar 2025 |
6.71 |
6.96 |
7.1 |
14 |
| Apr-Jun 2025 |
6.30 |
6.55 |
7.1 |
55 |
The PPF rate has remained steady at 7.1% since April 2020 even though the g-sec yields have been volatile. What’s more, during the same period, the rates of many other Post Office schemes have been revised upwards. For the same reasons, some experts also feel the government may not reduce the PPF rate below the psychological level of 7%.Interest rate changes of Post Office schemes since April 2020
| Scheme name |
Interest rate in Apr 2020 (%) |
Interest rate in Apr 2025 (%) |
Change (bps) |
| Sukanya Samriddhi Yojana |
7.60% |
8.20% |
60 |
| Senior Citizen’s Saving Scheme |
7.40% |
8.20% |
80 |
| NSCs |
6.80% |
7.70% |
90 |
| PPF |
7.10% |
7.10% |
No change |
Even if the PPF rate is cut, the scheme will continue to draw investors. The interest earned is tax free, making it a better option than bank deposits where the interest is fully taxable at the slab rate applicable to the investor. In the 30% tax bracket, the post tax yield of a 7% fixed deposit is barely 4.8%.PPF is also a good option for high income earners who were salting away large amounts into the Voluntary Provident Fund to build a tax-free retirement corpus. The 2021 budget put a cap on such contributions. If the total contribution to EPF and VPF exceeded ₹2.5 lakh in a financial year, the interest earned on the excess amount was made taxable.
