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How the interest on PPF is calculated?

Want to know how the interest on PPF is calculated? The amount of balance you have in your account by 5th of every month will be charged with the interest of one month. This way, the interest on the twelve months of the year is withdrawn separately and credited to your account at the end of March. That's why you don't see any financial year increasing your money. The government announces the rate of interest on PPF annually (annually). The annual rate of interest (annual interest rate) is calculated by dividing 12 to monthly interest (monthly interest rate) and calculating accordingly. The government has linked the interest rate of PPF account and all other saving schemes to government bond rates. The interest rate of PPF accounts and all other savings schemes is decided on the basis of any returns made by the 10-year government bonds. That is why the government announces a new interest rate every quarter.

Note: You can get a full year interest on any instalment only if the money is deposited between 1 and 5 April. Later whenever you deposit, it earns interest for the remaining months.

 

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