Unlocking Financial Benefits! Invest Before THIS Date in PPF and SSY for Maximum Returns, Check Here

Investment Tips: Personal finance followers should be aware that initiating investments between April 1 and April can enhance the benefits of programmes like the Public Provident Fund (PPF) and Sukanya Samriddhi Yojana (SSY). The new fiscal year, FY 25, officially began day before yesterday.

Impact of Timely Deposits on Interest Calculation

This is due to the fact that the lowest amount in the account will be used to calculate interest for both PPF and SSY at the end of each month and on the fifth day of the month. Investors can maximise the impact of compounding by depositing Rs. 1.5 lakh in PPF or SSY within the first five days of April. This will allow the entire amount to receive income for the duration of the financial year. It is well known that the power of compounding is how both of these techniques do their magic.

Impact of Early Annual Investment in PPF

Consider the Public Provident Fund (PPF) as an example. Although interest rates are subject to quarterly revision, assuming you invest a maximum of Rs. 1.5 lakh annually between April 1 and April 5 at the current 7.1% interest rate for the full 15 years, the balance at maturity will be Rs. 40,68,208, according to an online calculator on the Axis Bank website.

Staggered investments, on the other hand, will lower the total interest returns. Examples of this are monthly investments and investments made after April 5. The maturity amount would only be Rs. 39,44,600 if you chose to invest Rs. 12,500 per month rather than the Rs. 1.5 lakh you would have invested annually (Rs. 12,500 * 12 = Rs. 1,50,000).

Public Provident Fund

The current interest rate is 7.1% APR through the conclusion of the quarter in March 2024. A PPF investment has a 15-year lock-in term. It can be prolonged indefinitely in intervals of five years and is not required to be closed.

The maximum deposit permitted in a financial year is Rs 1.5 lakh, while the minimum annual amount needed to maintain the account's activation is Rs 500. PPF falls into the taxable-exempt-exempt (TEE) category under the new tax laws, meaning that investors cannot deduct their PPF contributions from their taxes.

Sukanya Samriddhi Yojana (SSY)

A savings plan designed specifically for girls, the Sukanya Samriddhi Yojana (SSY) enjoys the same tax exemption status as PPF. Its interest rate, which is now 8.2 percent, is evaluated on a quarterly basis. It has a 21-year lock-in period, after which you can withdraw your money after 15 years.