PPF (Public Provident Fund)
Also known as: Public Provident Fund
The Public Provident Fund is a government-backed, long-term savings scheme with a 15-year lock-in, tax-free interest, and Section 80C tax benefits.
PPF is one of India's oldest and most popular savings instruments. It carries a sovereign guarantee from the Government of India, making the principal and interest entirely risk-free — there is no market-linked component.
The interest rate is set by the Ministry of Finance every quarter and is currently around 7.1% per annum. Interest is compounded annually and credited to the account on March 31. Crucially, both the interest earned and the maturity amount are tax-free, making PPF a rare 'EEE' (Exempt-Exempt-Exempt) instrument.
The lock-in period is 15 years, with limited partial withdrawal allowed from the 7th year. You can also extend the account in 5-year blocks after maturity. Annual contributions can range from ₹500 to ₹1.5 lakh, and the ₹1.5 lakh ceiling counts towards Section 80C.
PPF works best as the debt-anchor of a long-term portfolio. It won't outpace equity, but its capital safety and tax-free compounding make it ideal for goals like a child's education corpus or retirement.