Friday, March 18, 2016

Impact of PPF Rate reduced from 8.7% to 8.1 %

Impact of PPF Rate reduced from 8.7% to 8.1 % 



As expected, government do not want to take burden on it's own balance sheet, so they are going to pass it on to consumer by linking it to Gsec Rates in India.


Example :- if someone is investing with a view that one will get return of 8.7% compounding returns over a period of 15 years of tenure of PPF, now that charm is gone as PPF rates are volatile.



Someone having 20,00,000 Balance in PPF which were earning around 1,74,000 per year (tax free) will result in earning 1,62,000 (tax free) i.e loss of Rs. 12,000 loss every year from this time.



above all, no one understand the Inflation scenario when investing in PPF.