PPF Interest Rates

The interest rate on Public Provident Fund (PPF) has now been cut to 8.7 per cent from 8.8 percent with effect from 1 April, 2013. Central Government specifies in the Official Gazette from time to time the Interest rate which shall be provided on the balances in PPF account. The interest is computed on lowest balance in the PPF account between 5th and end of the month. For example, if you had Rs. 3 lac in your PPF account on 1 Jan 2012 and you deposited Rs. 50K on 10th Jan. Your month end balance was Rs. 3.5 lac. You shall be provided interest on Rs. 3 lac for the month of January.
The interest amount is credited into the PPF account on an annual basis.Hence PPF interest is compounded on an annual basis.The current interest rate provided on PPF  account is 8.7% w.e.f. 01.04.2013. The historic rates provided on PPF accounts are : ·            
01.04.1986 to 14.01.2000               12%
15.01.2000 to 28.02.2001               11%
01.03.2001 to 28.02.2002               9.5%
01.03.2002 to 28.02.2003               9%
01.03.2003 to 30.11.2011               8%
01.12.2011 to 31.03.2012               8.6%
01.04.2012 to 31.03.20                   8.8%
01.04.2013 onwards                       8.7%   
PPF Account can be opened with almost all the Public Sector Banks and all resident Indians are eligible.