Tips & Advice

Tips To Earn Maximum Interest From Your Public Provident Fund

Personal Finance

The Public Provident Fund (PPF) scheme was made to help Indians save money over time. Those who have invested under this plan will get money from the PPF account after a minimum of five years. They can then choose to extend their lock-in period in blocks of five years for an indefinite period.

Every year, a person can invest up to Rs. 1.50 lakhs in the scheme. This programme is open to all Indian citizens who work in the private or public sector, except those covered by the EPF plan and Indians who don’t live in India.

How to Figure Out Interest in a PPF

The Public Provident Fund’s interest rate changes over time. This rate of return changes depending on the type of government bond bought. The PPF’s interest rate changes every three months. Because of this, the account’s interest is added every month. The principal and interest of PPF are invested for future growth.

At the end of each fiscal year, this account’s value is changed to account for the interest earned. It is then put back into the account. When this happens, people take money out of their PPF accounts. You can take it out as needed or wait until the end of the investment period to get the most out of your money. For the third quarter of the current fiscal year 2022–23, October through December, the PPF interest rate is 7.1%.

Strategies for Making the Most of Your PPF

Putting money into a PPF earns more than putting money into a fixed deposit at a bank. One way to increase one’s income is to put money into the PPF. In the following sections, we’ll talk about several ways to make more money from the interest on your PPF.

When to put money away each month.

The PPF account’s monthly interest is calculated on the 5th of the following month. Before the 5th of the month, you must put money into the PPF. When money is invested before the 5th of the month, it earns interest for the whole month. If a person invests after the 5th of the month, they won’t get any interest.

The right time to put away money.

The minimum balance in the PPF account is used each year to figure out the investment period’s interest rate. So the investor doesn’t have to put away the same amount every month. Instead, the investor can save all the profits at the start of the fiscal year. Since the fiscal year goes from April to March, the best time to invest is from April 1 to April 5. The minimum amount in the PPF account will increase, earning them more interest.

Digital PPF account.

You can get the best returns by using digital banking to regularly put money into a PPF account. People need to plan a trip to the bank around the time their monthly PPF payments are due. Because of this, investments are often put off or never made at all. You can make the most of your investment by opening a PPF account with a bank that works with online service providers.

PPF Account in the Name of the Spouse

You can open a PPF account in your spouse’s name so she can get the money from your investments. According to the law, gifts of money or property are not taxed. So this saves the investor money on taxes in two ways: there is no need to pay taxes on the property or the money in the PPF account.

Set aside money for children.

The Income Tax Act lets you invest up to a certain amount of money tax-free for your children’s education. A child can put the most into a PPF account each year is Rs 70,000. This investment could pay for the child’s education until they are eighteen.

Take out only what you need.

If you take too much money out of your PPF account, the level above which you have to pay a fee may go down. The investor’s monthly investment return might be less than expected. Investors are only allowed to use PPF in case of an emergency. So, you have a better chance of making as much money as possible during the month or fiscal year used to figure out interest.

How to get the most out of PFF

The PPF has a lock-in period of 15 years. Most people have trouble with this because they need more patience, but the high rate of return on investment that comes from saving early for retirement may be very helpful. Currently, the most you can earn on an annual savings account is 7.9%, while the most you can make on a PPF is 7.1%. (FY 2019-2020). 

PPF account holders can make a tax-free withdrawal of part of their savings after seven years if needed. Withdrawals made after the 15-year lock-in period are also not taxed. In addition, three years after the account is opened, you can borrow against the PPF balance. This makes the total interest rate on loans go down. Lastly, it’s essential to know that the PPF has two tax benefits. Under section 80C of the Income Tax Act, both withdrawals and interest added to the money in the PPF account are tax-free.


When you retire, the PPF could help you save money on taxes. People who join this plan can choose to invest some of their monthly or annual income for the near or distant future. Every three months, the interest rate that these funds earn is changed. Always consult experts like Piramal Finance, who can guide you professionally to better gains.