There are different ways to earn extra money on the earning and Public Provident Fund (PPF) is one of the most popular among the. This long-term investment instrument in the country. With a maturity period of 15 years, PPF offers exempt-exempt-exempt (EEE) income tax benefits. Also, since it is a government-backed investment scheme, it offers guaranteed returns on your deposits.
The government decided the PPF interest rate and it is revised for every quarter depending upon the yield of government securities. For the April-June quarter, the government kept the PPF interest rate unchanged at 8 per cent.
The subscribers of PPF should note that it is beneficial to make monthly deposits before the fifth of every month as the interest rate (8%) offered on PPF deposits is calculated on the minimum balance in the account before the fifth of every month.
This means that if subscirber have Rs 1,000 balance in your account as of the fifth of the month, the interest will be calculated on that amount. However, if you succeed in depositing money before fifth, then the interest will be determined on the new minimum balance.
Under this scheme you can make a decent earning by investing a small amount. Paying a monthly deposit of Rs 10,000 before fifth from April to March could add up to Rs 5,200 by the end of 12 months as compared to Rs 4,400 if you deposit after fifth. This means that you earn Rs 800 extra every year and if the interest rate remains at 8 per cent for the whole tenure and you deposit the same amount before the fifth of every month, you will be able to earn up to Rs 12,000 more.