India: Public Provident Fund (PPF)

The Public Provident Fund (PPF) is a government-backed long-term savings scheme in India, prized for safety and tax-free returns.

Key features

• 15-year term (extendable in 5-year blocks).
• Interest rate set by the government each quarter (historically attractive and tax-free).
• Invest from a small minimum up to a yearly cap (commonly cited as ₹1.5 lakh per year).
• Sovereign backing — effectively risk-free.

The tax advantage (EEE)

PPF enjoys Exempt-Exempt-Exempt status: contributions qualify for deduction under Section 80C, the interest is tax-free, and the maturity amount is tax-free — a rare and powerful combination.

What it's for

• A safe, tax-free core for long-term and retirement savings.
• Diversifying away from market risk with a guaranteed return.

Things to note

• Long lock-in: partial withdrawals and loans are allowed only after set years, so it's genuinely long-term money. See liquidity.
• Returns, while attractive, may trail equities over very long horizons — so PPF often sits alongside, not instead of, equity funds.

Key takeaway

PPF is a cornerstone of safe, tax-efficient long-term saving in India. Amounts and rates change — check current limits — but its EEE status makes it hard to beat for the guaranteed portion of your portfolio.