PPF

Public Provident Fund is a 15-year government-backed small-savings scheme that is arguably the single best sovereign-guaranteed debt instrument available to Indian residents. It earns a government-announced rate (currently 7.1% compounded annually, revised quarterly), and falls in the exempt-exempt-exempt (EEE) tax category — contribution qualifies for 80C deduction, annual interest is tax-free, and maturity proceeds are tax-free. No other debt product packages those three together.

You can open a PPF account at any major bank or post office. The annual deposit limit is ₹1.5 lakh (minimum ₹500) — deposits before the 5th of each month earn interest for that month. Example: ₹1.5 lakh/year for 15 years at 7.1% compounds to about ₹40.7 lakh — of which ₹22.5 lakh is your principal and ₹18 lakh is tax-free interest. Partial withdrawal is permitted from year 7; loans against balance from year 3 to year 6.

At the 15-year mark, you can withdraw the corpus, extend in blocks of 5 years with fresh contributions, or extend without contribution (still earning interest). One PPF per adult individual — joint accounts are not allowed but minors can have one via a guardian.

Model your corpus at different annual contributions and extensions using our PPF calculator to decide whether to pair PPF with ELSS and NPS inside your 80C basket.