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Home >Money >Personal Finance >Deposit date in PPF account matter for investors. How to maximise interest

The Public Provident Fund (PPF) interest rate is announced on a quarterly basis but it’s counted on a monthly basis. According to the PPF account rules, the Government of India (GoI)-backed small saving scheme calculates PPF account interest on the basis of minimum PPF balance available in the PPF account from 5th to last date of the month. So, if a PPF account holder deposits in one's PPF account from 1st to 5th of any month, he or she will be eligible for PPF interest of that month too.

Speaking on the PPF interest calculation Mumbai-based tax and investment expert Balwant Jain said, "As per the PPF account rule, PPF interest is calculated on the basis of minimum PPF balance from 5th to the last date of that month. In that case, if a PPF account holder makes a deposit in one's PPF account from 1st to 5th of any month, the PPF account holder will be able to get PPF interest accrued in one's PPF account for that month too. So, by depositing from 1st to 5th of the month, the PPF account holder gets an opportunity to maximise one's income from the PPF account."

Alerting PPF account holders who deposit through cheque SEBI registered tax and investment expert Jitendra Solanki said, "If a PPF account holder is depositing via cheque, then they need to note that date of deposit will be considered the date on which the cheque gets cleared. So, it's advisable for such PPF account holders to deposit in advance so that the cheque gets cleared on or before 5th of the month. This will ensure PPF interest benefit of that month otherwise the PPF account holder will lose interest of that month."

From April 2016, PPF and other small saving schemes are notified on a quarterly basis. The central government recently notified all its small saving schemes including PPF. In this notification, PPF interest rate for April to June 2021 was announced 7.1 per cent per annum.

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