First let’s look as to how the PPF interest is calculated?
Calculation of PPF interest
PPF account’s interest is not fixed. It’s now decided by the government. For the fiscal year of 2013-14, government has decided to give interest at 8.7%. The interest is compounded annually & gets credited at every year’s end. However, the interest is calculated every month. It’s calculated on least balances of your account between 5th & final day of a month. This means that if you fail to deposit on or before the 5th of any month, you don’t get an interest for that particular month.
Further you can browse through the ways to get maximum interest from your PPF account
An efficient way to maximize your interest rate is to deposit Rs. 1 lakh at once in the financial year’s beginning. This is the maximum investment amount for a year. PPF account follows a trend from April to March every year. Therefore, you can earn maximum interest if you deposit on or before 5th April each year. When you deposit at once, you get interest for the entire year.
Otherwise, when you deposit your amount on a monthly basis, it’s advisable to do it on or before the 5th of each month. This gets you the interest for that particular month. In the long term, you will find that such practice will create a sizeable corpus.
Hence, now you know the ways in which you can earn maximum interest from your PPF account easily.