Public Provident Fund: Missing this 5th-day PPF deadline could cost you interest every month

Individuals who invest in a Public Provident Fund (PPF) should always try to deposit money into their PPF account before or on the fifth of every month. This helps gain interest benefits for that month.

If you invest in your PPF account before the 5th of every month, your deposit will be considered for the interest calculation of that month. However, if you miss the deadline, you will miss out on the interest for that month. Therefore, investing in a PPF account before the 5th of every month helps you maximise your returns.

Imagine you have ₹1.5 lakh to invest in a PPF account. If you invest it on April 20th, you will not get the 7.1% interest (current interest on PPF account) for the whole year because you missed the April 5th deadline.

You will only get the interest for 11 months. That means you will earn ₹9,762.50 for FY2026-27. If you invest before April 5th, you will earn ₹10,650 in interest. If you wait until March 1st, 2027, to invest, you will only get the interest for one month, i.e. ₹887.50.

It is always advisable to invest in the PPF at the beginning of the year. This way, you will be earning interest on the deposits for the entire year.

Therefore, investors who intend to make a lump sum investment in PPF must preferably do it before April 5th to make the most of the interest.

To maximise the interest, investors who anticipate making a lump sum PPF investment should ideally do so before April 5.

As for monthly instalments, money must be deposited before the 5th of every month.

PPF and income tax benefits

Most investors tend to put a lump sum into their PPF account towards the end of the financial year, usually in March, to claim a deduction of up to ₹1.5 lakh. However, it’s important to note that this tax deduction is available only under the old tax regime.

That said, even if you have opted for the new tax regime, PPF continues to remain an attractive long-term investment. This is because it enjoys Exempt-Exempt-Exempt (EEE) status. In simple terms, your investment grows tax-free, the interest earned each year is not taxed, and the maturity amount is also fully exempt from tax.

So while investors under the new regime may not get the upfront deduction benefit, they still enjoy completely tax-free returns over the long term, making PPF a solid option for retirement-focused savings.

"The rates of interest on various Small Savings Schemes for the first quarter of FY 2026-27, starting from April 1, 2026, and ending on June 30, 2026, shall remain unchanged from those notified for the fourth quarter (January 1, 2026 to March 31, 2026) of FY 2025-26," the finance ministry said in a notification.

As per the notification, the interest rate for popular PPF scheme has been retained at 7.1 per cent.