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PPF Interest not calculated correctly

edited March 2013 in General
The PPF calculation is done based on PPF rules. Interest is calculated based on a minimum balance between 5th and the last date of the month, as per the interest rate set by you.

The difference which you are seeing can be because interest rate has changed over the years and you might have set 8% current interest rate in PPF investment. So, all your initial year calculation in PPF might have been based on this 8%, but interest rate was higher in earlier years.

To sort this out, it is advised that you enter all the investment entries and interest entry on 31st March of all the previous yeas as per your PPF passbook up to say the current year such as 31-Mar-2011. After this, you set the interest rate at 8% and you will get the correct accrued interest on any given day and your interest income for the current year will tally with your PPF passbook.
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