I want to invest Rs. 3 lacs. i dont have any PPF account. I am a bachelor, can I open an account in name of mother, father, brother etc?. What interest i will get if i put more than Rs. 70,000 per year? ( all 3 lacs in PPF account).
I want to know whether the information on "How govt calculates interest for PPF", is correct.
There is one reply to this article saying this information is wrong.
If this is the case as you told, everybody will deposit money in PPF in february only.
Please clarify this for me. This is very important for me, as I have surplus money and I am not able to decide whether I should deposit that in PPF now or in February.
Re: RE:How exactly is interest calculated ?
by Rajasekhar on Sep 02, 2009 06:14 PM Permalink
To get maximum benefit out of PPF you should deposit in the month of April Preferably before 5th. PPF is calculated based on number of days the money is in the account.
Ex If you deposit 10000 on April 1 2009 On April 1 2010 your money will become 10800. If you deposit 10000 on October 1 2009 , On April 1 2010, your oney will become 10400 only.
Dear sir, I keep depositing Annual lumpsum amount in PPF account once every year. Kindly let me know which is the best period to deposit this amount every year so as to maximise returns. K.Prakash Hyderabad
In your article you say "Interest is calculated on the lowest balance between the fifth and the last day of the month of March. So make all your deposits before March 5. But don't do so way in advance. Put your money in a bank fixed deposit that matures by February. On maturity, put it in the PPF account. This way, your money works harder for you. "
This is wrong. Though interest is credited to your account in March, it is calculated on monthly basis. Instead of getting 4-5% on fixed deposites, it is better to deposit money in PPF and get 8%
RE:Wrong Information
by Test on May 18, 2005 04:23 PM Permalink
Hi, The information is correct . Govt claim its 8 % . But end of year is is only 6.7 % since its calculated between 5 the to 30 th . Its not worth ....
If I were to rate this Article I will give it only 6 out of 10. It is not clear whether this is written with the Rules as applicable to the Bill to be passed or with the one that has been in practice for the assessment year 2005-06. Keep your Money in Bank FD until February and then Switch to PPF seems to be a sound advice provided there are enough Banks which give more than 8% Interest for Non Sr. Citizen that too for Term Deposits of "Less than 12 Months". Delaying the Deposit into the PPF till the last Month might just give us room to vary the amount just in case we need the same money for another expense.
This article says that "Put your money in a bank fixed deposit that matures by February. On maturity, put it in the PPF account. This way, your money works harder for you."
So if Mr. A invest Rs 10,000.00 in PPF a/c in the month of May '05 and Mr. B invest same amount on March 1st, '06 then both will get same interest on the principal for that year?
I don't think so, it would be like a cut-off date for getting interest for that month. Just like bank have 10th of every month.
No bank fixed deposit gives 8% compounded. Earlier you invest in PPF a/c, more the interest earned. Correct me if I am wrong.
Interest in your PPF account is calculated on the lowest balance between the close of the fifth day and the last day of every month and is credited to the account at the end of each financial year i.e., on 31st March. So if you invest by the 5th of the month, you will be eligible to interest for the full month in which you are investing.
So if I deposit on March 3rd , I will get interest only for Month of March i.e. (PPF interest)* Amount/12 . I will not get interest for the full year.
Re: Clarify me this
by Rajasekhar on Sep 02, 2009 06:20 PM Permalink
In Case A intrest amount earned is 262.5 .75x7x5000 In Case B interest amount earned is 37.5 only
