The new financial year 2024–25 has begun, and taxpayers are busy deciding which investment options to choose for saving taxes and optimizing their earning potential from those financial instruments. Among the various options available, two popular tax-saving investment avenues are the Sukanya Samriddhi Yojana (SSY) and the Public Provident Fund (PPF).

If you’re planning to invest your money in these two schemes, you should be aware of this one secret. If you invest in SSY and PPF by today, April 5, you will get significant interest benefits.

Sukanya Samriddhi Yojana:

This Government of India-backed saving scheme was introduced in January 2015 to encourage parents to save for their daughters’ future expenses. At present, SSY investments attract an annual interest rate of 8.2 percent.

Also Read: Tax Saving: Top 5 investment options to save maximum tax in 2024

How does investing in Sukanya Samriddhi Yojana by April 5 make a difference?

Investing in SSY by April 5 will result in higher tax-exempt interest earnings for the SSY account holder. This will ultimately translate to greater savings for the girl child’s future. Therefore, date matters a lot when it comes to investing.

Under the rules for SSY, interest is calculated based on the lowest balance in the account between the close of the 5th of every month and the end of the month. That’s why if you’re investing a lump sum in SSY for this financial year, it’s important to do it by today, April 5. Otherwise, you’ll miss out on extra interest for the whole year.

Even if you’re making monthly payments to your SSY account, make sure to do it on or before the 5th of every month. This ensures you won’t miss out on any monthly interest. If SSY dues payment is done after the 5th of any month, those deposits do not get included in the interest calculation for that particular month.

Public Provident Fund:

Public Provident Fund (PPF) is a very popular instrument to grow money and save on taxes. PPF currently provides an interest rate of 7.1% per annum. The main idea behind launching this financial investment was to encourage people to save small amounts of money while providing them with good returns on their deposits and tax benefits.

How does investing in PPF by April 5 earn more interest income for investors?

If you’re investing in a PPF account for this financial year (2024–25), make sure to deposit your money before April 5th. Doing so will help you earn higher interest on your investment.

Like SSY, in the PPF scheme, interest is calculated based on the lowest balance between the 5th and the last day of each month. To maximize earnings, investors should make lump sum payments before the 5th of every month. This is crucial for those making a single annual bulk deposit, as delays result in the loss of a full month’s interest.

Tax savings on SSY and PPF investments

In terms of tax-saving investments, SSY and PPF are quite popular among investors. Investing in both of these schemes under the old tax regime offers the benefit of tax exemption on investment up to Rs 1.5 lakh annually under Section 80C of the Income Tax Act.