look news india
Public Provident Fund (PPF) is the best scheme for investment. But why? Because along with good interest, tax benefits are also available here. Many times people are confused about when to invest in this scheme (Public Provident Fund)? Invest together or invest money every month? Personal finance experts believe that if you want to take full advantage of PPF, then keep in mind the 'special' date. If you invest in PPF in the first 5 days of the month, you will get more benefits. 7.1 percent interest is being given on PPF. Interest revision is reviewed every quarter. Interest in PPF account is calculated under monthly compounding.
What is the connection of special date in PPF?
The investor should deposit money in the PPF account by the 5th of every month. If deposited after the 5th of that month, interest is not earned on the deposited amount. Interest is calculated on the minimum amount between the 5th and the last date of every month.
Return calculations will be messed up
Let's start with the new financial year. You started investing from April. The first 5 days of April will be very important. Because, if you deposit Rs 1.5 lakh in PPF by April 5, you will get a total interest of Rs 10,650 at the rate of 7.1 percent in the financial year. But, the twist in this is that if you deposit this money on or after April 6, then the interest received in the financial year will be calculated for 11 months. Meaning one month's interest is over. In this case you will get interest of Rs 9,763. Meaning you will get Rs 887 less interest. Therefore the return calculation went wrong. The 5th of this month is very important.
Should we invest every month?
If you want to earn more interest on your PPF then invest all the money at the beginning of the financial year instead of investing every month. The investment limit in PPF in a year is Rs 1.5 lakh. If you are planning to invest the entire Rs 1.5 lakh or the amount you plan to invest between 1st to 5th in a year. Apart from this, if you are planning to invest every month then invest the money on or before the 5th.
Some special things related to PPF investment
- Apart from banks, PPF account can also be opened in post office.
- Initially it is opened for 15 years.
- Later it can be extended in blocks of 5 years each.
- Money can be deposited in this account at least once a year and as many times as desired.
- You can deposit a minimum of Rs 500 and a maximum of Rs 1.5 lakh once a year.
- The interest rate in the PPF scheme is revised every three months.
- Currently 7.1 percent interest is being given on PPF account.
- PPF account can be opened both single and joint.
- The facility to make nominee is also available in PPF.
- PPF account can be transferred from bank to post office or from post office to bank.
By depositing Rs 10 thousand you can earn Rs 2.71 lakh
Suppose you deposit Rs 10 thousand every year in PPF account, then according to the current interest rate, after 15 years it will be Rs 2 lakh 71 thousand 214. The total deposit amount in 15 years will be Rs 1.5 lakh and there will be income in it. Rs 1 lakh 21 thousand 214 will be received as interest. A total of Rs 2.71 lakh will be received which will also be completely tax free.