Public Provident Fund Interest: If you invest money in PPF, then to get its maximum benefit and maximum interest, you need to keep one thing in mind about which we are telling you.
Investing in PPF i.e. Public Provident Fund is a good investment option, but if you invest money wisely in it, then only you will get maximum benefit. For your information, let us tell you that if you are putting money in PPF every month, then deposit it at the beginning of the month by the 5th, so that you will get the interest for that month as per the PPF rules.
Why depositing money till 5th is beneficial
The simple answer is that interest is currently being paid on PPF at the rate of 7.1 per cent and it is decided on the minimum balance between the last date of the previous month and the fifth date of the new month. Interest is paid on the amount deposited in PPF accounts every month but the interest in the account is credited at the end of the financial year which is March 31 of every year. This interest is payable for that account only if the new amount is deposited in the account before the 5th of the month.
So investors can get the benefit of interest on interest only when the amount is deposited in the account by 5th date. If someone deposits money in the PPF account after the fifth of the month, then he will not be able to get the interest of the previous month and the interest of that month.
Understand it with example
Suppose there is Rs 1 lakh in a PPF account on 5 April 2022 and the investor of this account makes an additional investment of Rs 1.5 lakh on 6 April 2022. So according to the rules of PPF, investors will get interest only on the minimum balance from April 5, 2022 to April 30, 2022, which was Rs 1 lakh. This means that the investor will lose the interest of the investment of Rs 1.5 lakh for April 2022. This means that if the investor had deposited Rs 1.5 lakh in the PPF account by April 5, he would have got April interest on the entire investment of Rs 2.5 lakh.
Therefore, investors should invest with complete planning while putting money in PPF so that they can get maximum returns. They should take it as a rule to invest in PPF by the 5th day.
