Account holders should strive to invest the entire amount for the year before April 5 in order to get the most out of PPF. The optimum time to invest in the Public Provident Fund (PPF) for the fiscal years 2023–24 is right now and tomorrow. PPF is one of the most well-liked tax-saving investment plans and provides respectable returns (currently at 7.1%) over a lengthy 15-year maturity term. Additionally, PPF investments (up to Rs. 1.5 lakh), interest, and maturity earnings are also tax-free.
However, when it comes to investing in PPF, many investors wait till the end of the Financial Year and invest in this scheme as a last resort for tax savings. But by doing so, they fail to gain maximum benefit from the scheme as the interest calculation starts from the month of April itself.
BEST DATE TO INVEST IN PPF
You can deposit any amount ranging from Rs 500 up to Rs 1.5 lakh in a financial year. To make the most from PPF, account holders should try to invest the full amount for the year by April 5. Here are some reasons for doing that.
PPF deposit interest is computed on a monthly basis
While interest is calculated on the minimum balance in the account between the end of the fifth day and the end of the month, it is credited to the accounts around the conclusion of the fiscal year. This indicates that if you fund a PPF account by April 5 or earlier, interest will be earned on your deposit for the entire fiscal year 2023–24. If you deposit money on a day after April 5th, you will only be paid interest for 11 months.
For example, if your invest Rs 1.5 lakh in your PPF account by today or tomorrow (5th of April), the total balance in the account will become eligible for monthly interest calculation.
If you invest Rs 1.5 lakh on the 6th of April, your account balance will go up. But the monthly interest will be calculated only on the minimum account balance available at the end of 5th of April and the end of the month. So any amount you invest after the 5th of April and till April 30 will become eligible to be considered for interest calculation only next month. Therefore, you can earn the interest for the full 12 months if you invest in PPF account by April 5 i.e. tomorrow.
If You Are Unable To Invest In PPF By Tomorrow, Here’s What You Can Do
Even if you don’t make a PPF investment by tomorrow, you shouldn’t worry too much. Up to the end of the fiscal year, you can invest in PPF on any day. The yearly PPF interest rate is currently 7.1%. Your deposits can therefore earn a monthly interest rate of 7.1%/12 = 0.59%. (approx).
For the first quarter of FY 2023–24, the government has not adjusted the PPF interest rate from 7.1% to 7.1%. The Finance Ministry adjusts the interest rate for PPF and other National Savings Program accounts on a quarterly basis.