PPF Investment: If you have invested in the Public Provident Fund (PPF) or are planning to do so, April 5th is a very important date for you. Interest in PPF is calculated based on the balance as of the 5th of every month. This means that if you are depositing a lump sum for the financial year, depositing the money before April 5th will be beneficial for you. This will allow you to earn interest for the entire month.
Currently, an annual interest rate of 7.1% is applicable on PPF accounts. If a person deposits ₹1.5 lakh every year on or before April 5th for 15 years, the total interest earned will be approximately ₹18.18 lakh.
Read Here: SIP Investment Plan: Earn ₹30,000 Monthly? Build ₹1 Lakh Savings in Just 12 Months This Way
Loss if deposited after April 5th
However, if you deposit the amount after April 5th, the interest earned over 15 years will be limited to ₹15.84 lakh. This means that investing after April 5th will result in a total loss of ₹2.69 lakh.
Why is the 5th of the month important?
According to PPF rules, interest is applied only to the minimum balance in the account from the 5th of the month to the last day of the month. If someone deposits the amount on April 15th, they will not receive interest on that amount for April. To receive the benefit, it is necessary to deposit the amount by the 5th of the month.
Read Here: Looking for Safe Returns? This Investment Plan Can Earn You ₹2 Lakh in Interest
Current interest rate
For the April-June 2024 quarter, a 7.1% interest rate is applicable on PPF. Interest is added to the minimum balance in the account from the 5th of the month to the end of the month. Interest on deposits made after the 5th will be applicable from the following month. If PPF investors deposit their amount before April 5th, they will receive interest for the entire month and will gain an additional benefit of lakhs of rupees over 15 years.