PPF Investment Tips: If you are planning to invest in Public Provident Fund (PPF) in the current financial year to save tax, then keep in mind that invest in PPF before the fifth of every month. This is because if you deposit money at the beginning of the month, you will get interest even on the amount deposited before the 5th of the month. Apart from this, you can invest a lump sum amount in PPF on or before April 5 of a year to get interest for the whole year. (PPF Investment Tips)
PPF Investment Tips: How will you get more benefit
Actually, the interest given on PPF account (the rate of which is currently 7.1 percent) is calculated on the minimum balance present in the account between the fifth day of the month and the last day of the month. PPF is considered a good investment option. However, you must take care of the timing of investing in PPF i.e. invest before 5th to get maximum benefits.
Calculation of interest
Interest is calculated every month on the amount deposited in PPF, but the interest is credited to the account at the end of any financial year, ie on 31st March every year. Interest becomes payable in PPF for every month in which money is deposited before the 5th of the month. So, if the investment is made before the fifth day then you can get maximum interest on the interest. If you invest after the 5th day of the month, you may lose the interest income for that month.
Examples to make you understand
Suppose you had a balance of Rs 1 lakh in your PPF account on April 5, 2023, and you deposited another Rs 1.5 lakh on April 6, 2023, then as per the rules, interest will be given on the minimum balance, So the minimum balance in the account between April 5 and April 30, 2023 has been Rs 1 lakh. You will get interest on this. This means that you will not get interest on the amount of Rs 1.5 lakh for April 2023. Now, had the deposit been made on or before April 5, 2023, interest would have accrued on the entire amount, i.e. Rs 2.5 lakh.
