New Delhi: If you want to earn maximum return on your investment in the new financial year, then you can earn more profit by investing in Public Provident Fund (PPF) in a planned manner. For this, you will have to invest at the beginning of the month. With this, you will get maximum interest on your deposit. For this, you have to make a deposit before April 5.
Why deposit amount at the beginning of the month?
Why should the amount of investment be made at the beginning of the month. This question may come to your mind. To know this, you have to understand how interest is calculated. The minimum balance in a PPF account is calculated between the fifth and the end of each month. If you deposit the investment amount before the fifth date at the beginning of the month, then you will also get the interest payment on the deposit amount. If you do not do this, then you get the interest amount only on the balance of the previous month.
What is the mathematics of interest?
Let us understand by example. Suppose you already have six lakh rupees deposited in your PPF account. If you invest Rs 50 thousand on April 3, then at the current rate of 7.1 per cent, your monthly interest (7.1% / 12 X 6.50 lakh) = Rs 3,845. At the same time, if you invest 50 thousand rupees on April 10, then the interest will be calculated on the minimum amount between April 3 and April 30. In this case, you will get interest of Rs 3550 only. In this way you will get 295 rupees more interest. If you invest before April 5 of each financial year, then you will earn about three lakh rupees more than those depositing the amount later.
PPF is one of the preferred investment schemes of investors due to tax exemption
Be aware that due to tax exemption, investment in PPF is one of the preferred investment schemes of investors. It is one of those schemes that is tax free at all stages of investment. Investors get a deduction of up to Rs 1.5 lakh under 80C while depositing the amount. After maturity, the entire amount is waived even at the time of withdrawal. In addition, this investment scheme gives investors the sovereign guarantee of maximum income rate, fixed income. Currently, PPF is getting 7.1 percent return. At the same time, the average return on fixed deposits is about 5 to 5.5 percent. Therefore, to get more interest on the investment made in PPF, it is right to invest at the beginning of the month.
