How Interest is calculated on PPF account Investment?

Short Answer

The interest rate on PPF for the quarter Jan - March 2021 is 7.1% p.a. But, do you know how interest is calculated on your PPF account balance. Let's see to it.

Detailed Answer

PPF or Public Provident Fund is a common long term investment alternative. It's a secure investing option and a favourite of investors who wish to play safe.

Do you have a PPF account i.e. Public Provident Fund account? I think most of us do have a PPF account especially if you are a salaried person. Since PPF is considered a safe long term investment option in India. So, I just wanted to share: how interest is calculated on PPF account?

Firstly, interest rate on PPF for the quarter Apr-Jun'19 is 8% p.a.

How to Calculate Interest on PPF?

Let's discuss this step by step:

  1. The PPF interest rate is calculated on monthly basis. But, it is credited to your PPF account at financial year end i.e. 31st March.
  1. If you make contribution towards your PPF account before 5th of every month, the interest becomes payable for that month. So, it is generally advised to deposit money in PPF account before 5th of a month since that can earn you extra interest.

So, I think its wise enough to put money in PPF account before 5th of every month. What do you think? Did you know this fact about PPF interest calculation and how it reflects in your account? Do share your feedback.

Tagged With: ppf accountppfppf interest ratepublic provident fund
Categories: Investment
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Discussion (1)

    I didn't knew it really makes a difference if one deposits in PPF before 5th or after that in a month. Thanks for clearing this fact. I'll keep in mind to contribute to my PPF account before 5th of every month. Why not earn some extra interest if depositing before 5th of every month can fetch full month's interest.

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