I have opened a PPF account on 07-01-10 and deposited 60,000 Rs. How much exact interest I’ll get on 01-04-10. As I know, I should get 4800/- (according to 8%) and my balance on 01-04-10 will be 64800. But I have a doubt regarding calculation of interest rate. Is it calculated month-wise & Pro-rata basis (as calculated with Saving account) or what ever amount is there at the end of the financial year, you will get 8% of that? Please let me know???

Dates are in dd/mm/YYYY format

It is not closed. Account is still running…

Thanks Gopal Sir. It means PPF interest is calculated monthly not yearly. So in my case on 1st April 2010 in account balance would be 60800 not 64800, right?

FV = PV * (1+i) ^n

Your dates are wrong – I’m a finance major. you say you opened an account in July 2010 and closed in January 2010 – this is backwards.

Short answer is this. After one year, 8% interest on 60,000 is 4,800 so you would have 64,800.equation shown as (.08)60,000 = 4,800 + 60,000 = 64,800

If no money is taken, the second year is (.08)64,800 = 5,184+64,800 = 69,984

Use the initial equation to cut out the middleman in terms of years where 60,000(1.1664) = 69,984

As per Small Deposit Scheme, the amount deposited in PPF account before 5th of each month is eligible for interest for that month. As per the dates provided by you, the amount has been deposited on 7th January 2010 and therefore, you are not eligible to receive interest for Jan 2010. The interest will be payable for the months of Feb. and March i.e. for two months. The interest for two months will be Rs.800/- only (i.e. interest for Rs.60000/- for 12 months @ 8% comes to Rs.4800/-).

The interest on PPF account is applied once a year and credited to the account on 1st April every year.