PPF Interest Rate: If you pay in PPF before the 5th, you will get more profit! What is the harm if given later? – mssewb.org

Many Indians invest in FDs for long term investment. Many people also choose Public Provident Fund. PPF is basically a small savings scheme. Investors in this scheme get great returns. Usually this scheme is done for 15 years, money is locked in period. At the end of the 15 year term the policy term can be extended by another 5 years. An individual can invest a maximum of Rs 1.5 lakh annually in PPF.

If a person wants to get maximum interest from this scheme, he should invest in this scheme on or before 5th of every month. Deposits made after the 5th date may result in non-payment of interest that month. The whole point is clarified below with an example.

Let’s assume a person deposits Rs 1.5 lakh in PPF account on 20th April for that year. In that case he will get 11 months interest in that financial year. As a result he will get interest of Rs 9,726 after 1 year. But if he had invested Rs 1.5 lakh between April 1 and 5, he would have got Rs 10,650. Because in this case that person would get interest for 12 months only.

PPF currently has an interest rate of 7.1 percent. The government deposits this interest in the account on March 31 of every year. This interest rate is calculated every year.

Currently PPF scheme is a very popular scheme for tax saving. Maximum investment in this scheme is Rs 1.5 lakh in a year. As this savings falls under the Small Savings Scheme, it is tax free. Individuals who are worried about retirement and are not hesitant about investing for the long term can invest in this scheme.

Specially, this scheme earns interest at compound rate. Any person can start investing in this scheme with just Rs.500. If a person invests in PPF, he is entitled to partial withdrawal from 7 years. Hence PPF savings can provide security even in times of emergency. Besides, PPF also offers tax exemption benefits. Maturity and interest received – Both are tax free.

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