What is PPF?

Background

PPF (Public Provident Fund) is a long-term savings scheme backed by the Government of India. It offers guaranteed interest, a 15-year lock-in and EEE tax status (exempt on contribution, growth and maturity).

Explanation

You can invest between ₹500 and ₹1.5 lakh per financial year in PPF via banks or post offices. The government declares the interest rate periodically. Contributions qualify for Section 80C, interest is tax-free and maturity proceeds are tax-free, so PPF is a powerful fixed-income pillar for retirement.

Example

If you invest ₹1.5 lakh every year at an average 7.5% for 15 years, your PPF balance can exceed ₹40 lakh. This low-risk corpus can support SWPs or be combined with EPF and NPS at retirement.

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