PPF: In PPF, you get better returns as well as the option of saving tax. But, despite being so popular, many people are not able to take advantage of it.
Public Provident Fund Interest Rate: Public Provident Fund is one of the most preferred options for safe and better returns. In this, you get the option of saving tax along with better returns. But, despite being so popular, many people are not able to take advantage of it. In such a situation, if you know how the interest on PPF is calculated, then you can earn more interest.
Expected change in PPF interest rate
Last days, it was expected from the government that there will be a change in the interest rate of PPF. But there was no change in the old interest rate for the quarter ended September. The government had cut the interest rate on 30 March 2020. At that time the interest rate on PPF was reduced to 7.1 percent. So far it has remained at 7.1 percent only. Now it may change in the quarter ending December.
This is how a fund of 1.5 crores will be made
You can invest a maximum of Rs 1.50 lakh in a PPF account in a year. Suppose, you invest Rs 12,500 every month in a PPF account. After maturity in 15 years, you can extend your PPF account in blocks of 5-5 years. In such a situation, after 30 years, the entire fund of your PPF account will be more than 1.5 crores (1,54,50,911). In this, your investment will be 45 lakhs and interest income will be around Rs 1.09 crores.
You can start investing in 25 years
Let us tell you that the sooner you start investing in this government scheme, the more it benefits. Suppose you are 25 years old and you invest Rs 1.5 lakh annually in PPF, then at the age of 55, that is, about 5 years before retirement, you can become a millionaire.
How to Calculate Interest on PPF
Interest is calculated every month on PPF. But it is credited to the account at the end of the financial year. That is, whatever interest you earn every month is put into your PPF account on 31st March. However, there is no fixed date for when to deposit money in the PPF account. You can deposit money in PPF monthly, quarterly, half yearly and annually.
How to get higher interest on PPF
Let us now explain how interest is calculated. Interest on PPF is calculated on the amount in the account from 1st to 5th of every month. That is, if you put money in the PPF account by the 5th of any month, then interest will be available on that money in the same month, but if you deposited the money after the 5th ie on the 6th, then the interest on the deposited amount will be available in the next month. will get.
Example of PPF Calculation
Let us understand this PPF calculation with an easy example. By which you will know how you can get more interest by investing money at the right time.
Example No.-1
Suppose you deposited Rs 50,000 in your account on 5th April, by 31st March you already have Rs 10 lakh in your account. From April 5 to April 30, the total amount in your PPF account was Rs 10,50,000, which is the minimum balance. So on this monthly interest at the rate of 7.1% is – (7.1% / 12 X 1050000) = Rs 6212
Example No.-2
Now suppose you did not deposit the amount of Rs 50000 till 5th April and then deposited it on 6th April. From April 5 to April 30, the minimum balance in your account will be Rs 10 lakh. What was the monthly interest on this at the rate of 7.1%
(7.1%/12 X 10,00,000) = Rs 5917
You will get more interest on depositing such money
Imagine, the investment amount is only 50,000, but the method of deposit made a difference in the interest. In such a situation, if you want maximum interest on your money in PPF, then keep this trick in mind and deposit the money by the 5th of the month so that you definitely get the interest for that month. Experts also advise that the investment of 1.5 lakh on PPF is tax exempt, so if you want to take this tax exemption, then deposit the entire amount of 1.5 lakh between April 1 and April 5 as soon as the new financial year starts. Give. If you are not able to do this, then deposit the money by the 5th of every month.
