PPF ALERT! BIG PPF TRICK - Check how to earn maximum interest on Provident Fund (PF) balance, just try THIS strategy

Public Provident Fund or PPF investment has huge traction among Indian millennials. Major reason for its popularity is its risk-free nature and assured return guarantee. One of the major reasons for people investing in PPF is an income tax exemption under Section 80C. A PPF investor can claim income tax exemption benefits upon his or her investment up to Rs 1.5 lakh. However, to maximise PPF investment, one needs to know that how does the government credits PF interest on your PF account. According to the tax and investment experts, the PF managing government institution gives interest on the lowest amount left in your PPF account between 5th to the last date of the month. So, if an investor invests before 5th of every month, he or she can get interest on the investment done in between 1st to 4th date of the month as well.

Elaborating upon the reason for people investing in PPF; Kartik Jhaveri, Manager — Wealth Management at Transcend Consultants said, "PPF investment is a risk-free investment and government of India announces interest rates on PPF on a quarterly basis. Currently, the interest rate on PPF is 7.9 per cent." Jhaveri said that PPF investment qualifies an investor to claim income tax exemption benefit on up to Rs 1.5 lakh investment under Section 80C of the Income Tax Act. However, he said that there are several other rules that an investor might not be aware of and PF interest rate calculation is one of them. He said that if a person knows about the PF interest rate calculation, he or she can maximise one's PF account returns.

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Asked about the PF interest calculation norms; Manikaran Singh, a SEBI registered tax and investment expert said, "A PPF account holder can invest from Rs 500 to Rs 1.5 lakh in PPF and a maximum number of investments that he or she can do her is 12. The monthly interest incurred on one's PPF account is calculated on the minimum balance left in the account between 5th to the last day of the month. So, to maximise one's PPF returns, one needs to invest in his or her PPF account before the 5th of the month." He said that if an investor decides to invest a lump sum amount in his or her PPF account, he or she should try investing it on or before the 4th of the month. In such a case, he or she would be able to get PF interest on the amount invested.