Maximize Your PPF Interest: Why You Should Deposit Before April 5

If you’re planning to invest in a Public Provident Fund (PPF) for the 2025-26 financial year, depositing your money before April 5 can help you earn more interest.

Why the Deposit Date Matters

The PPF interest rate is 7.1% per year (as per the latest government rates). However, the interest is calculated based on the lowest balance between the 5th and last day of each month.

This means if you deposit before April 5, your money will earn interest for the entire year. But if you deposit after April 5, you lose one month’s interest.

Example: The Impact of Early Deposits

• If you deposit ₹1.5 lakh before April 5, you will earn ₹10,650 in interest for the year.
• If you deposit after April 5, your interest drops to ₹9,762.50, losing one month’s earnings.

PPF Investment Rules

• You can invest ₹500 to ₹1.5 lakh per year in a PPF account.
• Deposits can be made in one lump sum or up to 12 installments per year.
• PPF has a 15-year lock-in period, making it a great long-term savings option.

Power of Compounding Over 15 Years

If you invest ₹1.5 lakh as a lump sum before April 5 every year, you could build a maturity amount of ₹40.68 lakh, with ₹18.18 lakh earned as interest.
However, if you delay your deposits throughout the year, your maturity amount may reduce to ₹37.98 lakh.

Lump Sum vs. Monthly Deposits

A lump sum deposit at the beginning of the financial year earns more than monthly deposits.

• Lump sum investment (April 1-5): Maturity amount of ₹40.68 lakh
• Monthly investment (₹12,500 per month): Maturity amount of ₹39.44 lakh
• Difference: ₹1.23 lakh more with early lump sum deposits

Tax Benefits of PPF

• Interest earned & maturity amount are tax-free under both the old and new tax regimes.
• Old Tax Regime: You can claim ₹1.5 lakh deduction under Section 80C.
• New Tax Regime: No 80C deduction, but the interest and maturity amount remain tax-free.

Final Tip

To get the best returns from your PPF, always deposit before April 5. This ensures maximum interest and tax-free earnings, making it a smart long-term investment.