Consider the following extract from a newspaper article :
The interest on your PPF balance is compounded annually, but the calculation is done every month. The interest is calculated on the lowest balance between the fifth and last day of every month.
So, if you invest before the 5th, the contribution will earn interest for that month too. Otherwise, it's like an interest-free loan to the government for a month
Let's say that there is already Rs. 2,00,000 in my PPF account and I deposit Rs. 1,00,000 in my PPF account today (14th March 2015), will this deposit not earn any interest at all since I did not deposit it before 5th of the month?