Regarding PPF Interest?

I have read on a website that “Even though PPF is 15 year plan but the effectual period works out to 16 years i.e. the year of opening the account and adding 15 years to it. The sum made in the 16th financial year will not earn any interest”

Is this correct?

I am going to open a PPF account in January 2012. Can I deposit Rs 100000 for this financial year (2011-12) and the same amount for the next 15 years i.e total Rs 1600000 or Rs 1500000? Will I get interest on my deposits i.e Rs(100000*16) for all 16 years (2011-27) ? or will i be given interest for only the Complete 15 financial years(2012-27)? or for the first 15 financial year including current 2011-12 year(2011-26)?

Please help me regrading this.

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Thanking You

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  1. PPF interest calculates on monthly bases (but credited at the end of financial year). Any amount credited on or before 5th get full month interest. So deposit (or cleared in case of cheque) on or before 5th of April fetch 12 months interest. 15 years are financial years not from date of a/c opening.

  2. My understanding it will earn interest for the 16th year.

    Interest is calculated on the lowest balance between the fifth day and last day of the calendar month and is credited to the account on March 31 every year. So to derive the maximum, the deposits should be made between 1st and 5th day of the month.

    Yes now limit is raised to Rs. 1,00,000 so now you can deposit the same, as this is with affect from first december 2011.
    PPF will get higher rate of return from december 2011