PPF account: If you have opened a Public Provident Fund account and are investing in it every month, then you must understand this rule of 5. There is a special reason behind this, let us know.
PPF account: There was a time when becoming a millionaire was considered a big deal. But, in today’s time anyone can easily become a millionaire. For this, you just need to have a good understanding of investment. There are many such schemes in the market which can easily make you a millionaire in a short time. One such scheme is Public Provident Fund. If you have opened an account in this but are a little careless in depositing money every month. So you may be harmed by this. There is a special reason behind this. That’s why it would be better that you deposit money in the PPF account on the due date of every month.
In such a situation, if you yourself are not able to deposit money every month by going to the bank or post office, then you can also deposit money in PPF account through online option. This will save your time and the hassle of commuting will also end.
This rule of 5 will make you a millionaire
If you deposit PPF amount in installment every month and want to get excellent returns on it, then it is important to remember the 5th of every month. This is because the interest on PPF is calculated considering the 5th of every month as the base. Interest on PPF account is calculated on the minimum balance available till the 5th day of the month. Therefore, if you want to get more benefits on the amount deposited in PPF, then deposit the money before the 5th of every month. If this happens, a new installment will be added to the deposit in the account.
Understand calculation like this
Suppose you have opened a PPF account with an amount of 500 rupees in March and you are investing 500 rupees in it every month through monthly installment. Now suppose you do not deposit the installment before 5th of April, then on the last of April your total amount will remain only Rs.500 and interest will also be available only on this.
Including the amount deposited after 5th, the total amount will be counted for the next month. At the same time, on depositing the installment after the 5th of May also, your total amount for that month will be Rs 1000 only and you will get interest on it.
Now suppose that if you deposit the installment before 5th of every month, then in the month of April your total amount will be Rs.1000 count and interest will be calculated on this. Similarly, on depositing the installment before the 5th of every next month, the total amount will go on increasing by Rs.500. That means you will always get full benefit.
This is how you can deposit money
You can also deposit money online in PPF account through Electronic Clearing System ie (ECS). In this, a fixed amount is transferred from one bank account to another every month i.e. as a routine. For this you have to apply for ECS in the bank. Once the ECS is activated, money will be automatically transferred from your bank account to the PPF account on the set date.
You can also transfer through NEFT
You can also deposit money online through National Electronic Funds Transfer ie NEFT. It is used through net banking. To deposit money in PPF through this medium, you need to have your PPF account number and the IFSC code of the bank branch in which you have your PPF account. With NEFT, you can transfer money in no time.
