When PPF Interest Will Be Credited - All You Need to Know

PPF is one of the most popular investments in India, favoured by investors who want to grow their wealth while reducing their tax burden. PPF is also an excellent choice for building a retirement corpus due to its assured returns and long tenure.

Before we reveal the tips to maximise your PPF returns, let's take a closer look at how PPF interest is calculated.

How Is Interest Earned on Your PPF Account

The PPF interest rate is not fixed but depends on the current yield of government bonds. It is reviewed by the government every quarter.

PPF interest is compounded annually, i.e., the interest you earn is not paid out to you but is credited to your PPF account at the end of every financial year and reinvested along with your contribution. The key point here is that while the interest is credited annually, it is calculated every month. The interest is calculated on the lowest balance in the Account between the 5^th of the month and the last day of the month.

The current (Q2 of FY 2025-26) PPF interest rate is 7.1% per annum.

Tips to Earn Maximum Interest on Your PPF Investments

Invest Before the 5th of Every Month

If you make monthly contributions to your PPF Account, then investing before the 5th of the month will help you earn maximum returns. This is because interest is calculated monthly, on the lowest balance in the Account between the 5^th of the month and the last day of the month. Thus, to maximise your returns, deposit funds before the interest calculation period of a particular month begins.

Invest a lump sum amount at the beginning of the financial year

Another way to maximise your PPF Account interest is by investing a lump sum at the beginning of the financial year. PPF Account interest is calculated from April to March every year. So, by depositing a large sum before the 5th of April, you can earn interest on your one-time deposit for the entire year.

Choose Internet Banking Transfer Facility

If you have no other option but to physically visit your bank branch or post office during working hours to make contributions to your PPF Account, there are chances that you might skip investing some years. On the other hand, if your bank offers direct fund transfers to your PPF Account using digital channels like Internet Banking, then you are likely to make regular contributions, thereby improving your chances of maximising returns. ICICI Bank offers direct fund transfer to PPF Accounts for our Account holders.

Use a free, online PPF interest rate calculator

If you need further help in finding the accurate interest your contributions earn, then use a PPF interest calculator. This is a handy tool that helps you predict the interest your contributions will earn and helps you tweak the contributions to maximise your returns.

DISCLAIMER

The contents of this document are meant merely for information purposes. The information contained herein is subject to updation, completion, revision, verification and amendment and the same may change materially. The information provided herein is not intended for distribution to, or use by, any person in any jurisdiction where such distribution or use would (by reason of that person‘s nationality, residence or otherwise) be contrary to law or regulation or would subject lClCl Bank or its affiliates to any licensing or registration requirements. This document is not an offer, invitation or solicitation of any kind to buy or sell any security and is not intended to create any rights or obligations. Nothing in this document is intended to constitute legal, tax, securities or investment advice, or opinion regarding the appropriateness of any investment, or a solicitation for any product or service. Please obtain professional legal, tax and other investment advice before making any investment. Any investment decisions that may be made by you shall be at your sole discretion, independent analysis and at your own evaluation of the risks involved. The use of any information set out in this document is entirely at the recipient's own risk. The information set out in this document has been prepared by ICICI Bank based upon projections which have been determined in good faith by lClCl Bank and from sources deemed reliable. There can be no assurance that such projections will prove to be accurate. lClCl Bank does not accept any responsibility for any errors whether caused by negligence or otherwise or for any loss or damage incurred by anyone in reliance on anything set out in this document. The information set out in this document has been prepared by ICICI Bank based upon projections which have been determined in good faith and sources considered reliable by lClCl Bank. In preparing this document we have relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public sources or which was provided to us or which was otherwise reviewed by us. Past performance cannot be a guide to future performance. 'lClCl ' and the 'I-man' logo are the trademarks and property of lCICl Bank. Misuse of any intellectual property, or any other content displayed herein is strictly prohibited.