PPF Investment Tips: The investment in PPF is calculated as per the 5th of the month and if the investor completes his investment by this date, he gets the interest for the entire month.
If you invest in Public Provident Fund (PPF), which is one of the best investment options, then this news is very special for you. Actually, the 5th of the month is very special for those who invest in this fund. If you make your monthly investment before 5 April, then you also get the full interest of that month, but if you are unable to do so, then you do not get this interest. In such a situation, you have a chance till 5 April 2024 to complete this work. Let us understand its complete calculation in detail…
PPF is a better option for safe investment.
Most professionals invest in PPF for tax saving but if you invest wisely, you will be able to get great returns. First of all, invest in PPF on a monthly basis and make sure to deposit the money by the 5th of every month so that you will get the interest for that month as well. With investment in PPF, the maturity amount and interest are also tax free. It is a better way of safe investment in the long term and to create a big fund. Investment in PPF account gets a tax deduction of Rs 1.50 lakh under section 80C.
5th of the month is special for investment.
If you invest lump sum in PPF at the beginning of every financial year, then investing by 5th April will prove to be even more beneficial for you. Talking about the reason behind this, interest is calculated on the 5th of every month in the PPF account. It clearly means that if you deposit a lump sum amount by 5th April at the beginning of every financial year, then you can get the benefit of interest for the whole month.
If a person invests in a PPF account by the 5th of the month, then he gets the benefit of interest for the entire month on the deposited amount. Whereas, if the investment is made after the 5th, then you get the benefit of interest only on the lowest balance between the 5th and the 30th.
This is the calculation of benefits
Interest on PPF account is calculated on a monthly basis, but it is deposited in the account only at the end of every financial year. Talking in detail, this time if you deposit Rs 1.5 lakh in your PPF account before April 5, 2025, then the entire amount will be taken into account for calculating interest for that month. That is, based on the current interest rate of 7.1%, you will get an interest of Rs 10,650 annually.
If you complete the transaction after 5 April, you will not get the interest for the first month. This means that you will get interest for only 11 months of the financial year except April and on calculation according to the interest rate, it will be Rs 9,762.50 on a deposit amount of Rs 1.5 lakh.
Related Articles:-
Post Office’s invest in this scheme, You will get fixed interest of ₹ 5550 every month
