The new financial year, 2025-26, has begun. This is a good time to plan your money and taxes for the year ahead.
There are different ways you can save tax while investing your money. One option is called the Public Provident Fund Scheme, or PPF.
It helps you save on taxes and also gives you good interest rates. It’s important to remember the date, April 5, for this scheme. If you miss this date, you might lose out on a lot of money.
Invest by April 5th
If you put your money into the PPF scheme by April 5th at the start of each financial year, you’ll get the highest interest rate.
Interest in your PPF account is calculated on the 5th of every month. So, if you deposit your money by April 5th, you’ll get interest for the whole month.
How interest works
The government offers an interest rate of 7.1 percent on money you put in the PPF account. If you invest by the 5th of each month, you’ll get the full interest on your deposit.
But if you invest after the 5th, you’ll only get interest on the lowest amount between the 5th and 30th of that month. This could mean you lose out on interest for that month.
Understanding the numbers
Let’s break it down with an example: If you invest up to Rs 1.50 lakh at the start of this financial year and keep investing for 15 years, you could earn a total of Rs 18.18 lakh as interest.
But if you invest after the 5th of each month, you’d only get Rs 17.95 lakh interest. That’s a loss of Rs 23,188 over 15 years
