PPF calculator: Don’t lose lakhs in interest! Why you should deposit money in Public Provident Fund account before April 5


ppf interest rate, public provident fund or PPF is a very popular investment option, especially for individuals looking for tax free returns with sovereign guarantee. The interest on PPF is tax-free, making it important to make timely deposits to maximize tax-free income. The maximum annual investment in a PPF account is Rs 1.5 lakh.
But did you know that the timing of your PPF deposits can impact the interest rate you earn, especially if you prefer to invest a lump sum in PPF? Let's understand this better:
Investors in Public Provident Fund (PPF) accounts for the financial year 2024-25 should ideally ensure that their investments are deposited before April 5 to optimize interest income.
As per the PPF scheme, interest is calculated based on the lowest balance between the 5th and the end of each month. Therefore, for those opting for lump sum payment for the entire financial year, it is important to make the deposit before April 5 to maximize returns. Any delay could lead to loss of one month's interest on annual deposits, especially hitting those making single annual bulk deposits, an ET report said.
Similarly, individuals making monthly contributions should ensure that payment is made on or before the 5th of each month to prevent any loss of interest.
Let's look at an example; If deposit is made on 15th April, interest calculation will consider the balance prior to this deposit for the month of April, resulting in no interest on additional April contribution. Conversely, deposits made on or before April 5 will earn interest for April, thereby increasing overall PPF returns.
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PPF Calculator: How to avoid losing lakhs in interest?

Interest in PPF account is calculated monthly, but it is credited annually, with the government reviewing the rates on a quarterly basis.

  • Let us assume a fixed interest rate of 7.1% per annum for 15 years. A person depositing Rs 1.5 lakh (maximum limit) annually before April 5 will earn Rs 18.18 lakh interest over a period of 15 years. In contrast, depositing after April 5 will yield only Rs 15.84 lakh, resulting in a loss of Rs 2.69 lakh over 15 years.
  • Similarly, for a monthly payment of Rs 12,500 (Rs 1.5 lakh in a year) made before the 5th of each month, the total interest over 15 years will be Rs 16.94 lakh. Deposits made after the 5th of the month will reduce the interest income to Rs 16.70 lakh, resulting in a loss of Rs 24,005 during this period.

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