The Public Provident Fund (PPF) is a prevalent long term investment option in India. There are many reasons for this. These include high returns, tax benefits, and sovereign guarantees of interest and principal. By investing in this scheme, investors can also deposit money for a large number of big expenses, including children's education and their marriage, besides creating a large retirement fund. The most important thing is that the scheme gets interest income, annual investment, and maturity amount in all three.
The government has not made any change in the interest rate of PPF for the July-September quarter. The PPF will continue to receive interest @ 7.10% from July to September. The interest in PPF is calculated every month, but it is credited at the end of the financial year. Many PPF investors fail to get more interest in the absence of small information. Let's know what it is.
The PPF scheme rules that the interest is calculated on the minimum amount deposited in the PPF account from the 5th of the month to the end of the month. If money is put in the PPF account before the 5th of this day, the minimum balance remains high during the period of calculation of interest. Even if you are investing in PPF on an annual basis, you should put the amount in your PPF account before April 5. In such a situation, you will be able to get maximum interest in the scheme.
Status on deposit of money after the month's five-date:
Suppose a person deposits Rs. 12,500 after the five dates of every month from April to March. The investor will get an Interest of April 7.10% interest rate of Rs 7.10, as the PPF account balance will be zero rupees on the 5th of the month, which is the minimum, and the interest received from it will also be zero rupees. Then, in May, the investor will also get an interest rate at Rs. 12,500, as the minimum balance of the account will be Rs. 12,500 in May in case of deposit of money after the fifth date, on which interest is to be calculated. Thus, the investor will get a total interest of Rs 4,881.25 at the end of the year, and the balance of the account will remain at the end of the year at Rs 1,54,881.25.
Status of depositing money before the 5th of the month:
If an investor deposits Rs 12,500 before the five dates of every month from April to March, the investor will also get the interest rate for the month of April, and he will get an interest rate at Rs 25,000 in May. The investor will get Rs 5,769 as interest at the end of the year. Also, the total balance of the account will be Rs. 1,55769, at the end of the year.
On deposit of lump-sum amount:
If an investor deposits a lump sum of Rs. 1,50000 in the PPF account before April 5 instead of depositing money every month, he will get maximum interest. Such an investor will get an interest of Rs 888 per month from April to March at Rs 1.5 lakh. The investor will get a total interest of Rs 10,650 at the end of the year, making the total deposit at the end of the year Rs 16,0650.
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