Public Provident Fund (PPF): If you’re looking to invest for the long haul and build a substantial fund, the Public Provident Fund (PPF) scheme could be a great option for you. By putting money into a PPF account, you benefit from compounding, allowing you to invest over time and accumulate a nice sum. We’ll explain how you can maximize your interest by contributing to your PPF account before April 5 each year.
To earn more profit, invest before April 5
Right now, the PPF account offers an annual interest rate of 7.1%. However, if you make your deposit before April 5, 2025, you can earn even more interest. This strategy is particularly advantageous for those who can make a lump sum deposit.
Invest between Rs 500 and Rs 1.5 lakh
In the PPF scheme, you can invest between Rs 500 and Rs 1.5 lakh each year, either through monthly contributions or as a one-time payment. If you deposit the full Rs 1.5 lakh before April 5, you’ll see higher returns. Interest is calculated on the total balance in your PPF account from the 5th of each month until the end of that month. So, if you deposit Rs 1.5 lakh as a lump sum before April 5, you could earn around Rs 10,650 in interest annually. If you miss the April 5 deadline, you’ll only earn interest for 11 months, totaling about Rs 9,762 for the year.
If you consistently invest a lump sum in your PPF account between April 1 and April 5 each year, you could have approximately Rs 40,68,209 after 15 years. In contrast, if you wait and make your lump sum deposit at the end of each year, you’d end up with around Rs 37,98,515 at maturity. If you choose to invest through monthly installments throughout the year, your total after 15 years would be about Rs 39,44,599. Plus, keep in mind that the interest earned on your PPF investment is tax-free.