In terms of safe long-term investment, Public Provident Fund (PPF) is one of the most favorite schemes of the people. This government-backed scheme not only keeps your deposits safe but also gives you good returns over time. If you invest in this scheme, then a particular date in the month of April is very important for you. Depositing money at the right time can give you maximum benefits, while even a slight delay can reduce your returns. In other words, ignoring this deadline may cause financial loss to you. Come, let us know about it in detail…
Why is it so important to invest in PPF at the right time?
In the PPF scheme, interest is calculated every month on the basis of the minimum balance that is maintained in the account from the 5th to the last day of the month. So, if you deposit money between 1st and 5th of the month, you get interest for the entire month. On the contrary, if you invest after the 5th, interest on that particular amount starts accruing from the next month.
How much loss can you incur if you invest late?
In simple words: If you invest before the 5th of the month, you get interest for the entire year. But, if you invest after this date, you lose about one month’s interest. Let us understand this with an example: Suppose you deposit ₹1.5 lakh in your PPF account. If you ensure that this amount is deposited between the 1st and 5th of the month, you will get an interest of approximately ₹ 10,650 annually. But, if you invest after the 5th, this annual interest reduces to approximately ₹ 9,763.
This means that just one day’s delay could result in a financial loss of ₹887. Therefore, keeping this special date in mind while investing in April can prove to be very beneficial for you.
How much return and what benefits do you get from PPF?
PPF is a long-term investment scheme with a lock-in period of 15 years. Any investor can start their PPF journey with a minimum amount of just ₹500, while the maximum annual investment limit has been capped at ₹1.5 lakh. In terms of returns, this scheme is currently giving interest at the rate of around 7.1 percent. This can be a good option for investors looking for a safe investment option.
