Investing in Public Provident Fund (PPF)? You can can slightly boost long-term returns by timing contributions wisely! Try depositing your money before 5th of every month to ensure that your money earns interest for the full month. This simple hack helps maximise compounding benefits over the years. Here’s how
What is PPF?
The Public Provident Fund (PPF) is a government-supported savings scheme known for its safety, steady returns, and tax advantages. The account has a 15-year tenure, which can be extended further in blocks of five years.
How PPF interest is calculated?
PPF accounts currently offer an interest rate of 7.1%, set by the government and revised annually. Although the interest is credited on March 31 each year, it is calculated on a monthly basis, which makes the timing of deposits important for overall returns.
If you invest in your PPF account before the 5th of every month, your deposit will be considered for the interest calculation of that month. However, if you miss the deadline, you will miss out on the interest for that month. In more simple words, if you deposit your money between June 1 and July 5, your money starts accruing interest from June itself. However, contributions made after the 5th, the entire interest calculation will start from July.
Therefore, investing in a PPF account before the 5th of every month helps you maximise your returns.
Here’s how the math goes:
Let’s say you invest ₹1.5 lakh to invest in a PPF. Now, if you have missed the April 5 deadline, you will get interest for only 11 month.
- So, if you deposit after April 5, you will earn an interest of ₹9,762.50 for FY2026-27 at 7.1% interest rate
- But, if the investment was done before the deadline, you will earn ₹10,650 in interest
So if you are making monthly instalments, money must be deposited before the 5th of every month.
PPF interest rate:
The government has recently announced the latest interest rates on various small savings schemes, including PPF, for the April to June quarter of FY27.
“The rates of interest on various Small Savings Schemes for the first quarter of FY 2026-27, starting from April 1, 2026, and ending on June 30, 2026, shall remain unchanged from those notified for the fourth quarter (January 1, 2026, to March 31, 2026) of FY 2025-26,” the finance ministry said in a notification.
This means that the PPF interest rates now stand at 7.1%. Notably, the government had last changed the interest rate on some small schemes, mainly operated by post offices and banks, in the fourth quarter of 2023-24 (i.e. January to March 2024).
