Public Provident Fund
Tax-free, government-backed, long-term savings
What is it?
PPF is a government-backed savings scheme with a 15-year lock-in. It offers guaranteed, tax-free returns and falls under the EEE (Exempt-Exempt-Exempt) category — the most tax-efficient instrument in India.
Current rate: ~7.1% p.a. (revised quarterly by the government).
How does it work?
- Open a PPF account at a bank or post office
- Invest ₹500 to ₹1.5L per year (min ₹500 to keep it active)
- 15-year lock-in with partial withdrawal from year 7
- Interest compounded annually — credited on March 31
- Can extend in 5-year blocks after maturity
Key rule: Deposit before the 5th of each month to earn interest for that month.
Who should invest?
- Everyone in the old tax regime — ₹1.5L deduction under 80C
- Long-term planners — Great for retirement or child's education corpus
- Conservative investors — Zero risk, government guarantee
In new tax regime: No 80C benefit, but the tax-free interest is still valuable if you're in a high bracket.
Tax treatment
EEE — Triple exempt:
- Contribution: Deductible under 80C (up to ₹1.5L)
- Interest earned: Fully tax-free
- Maturity amount: Fully tax-free
This makes PPF one of the most tax-efficient instruments, especially for those in the 30% bracket.
How to start?
- Open a PPF account at your bank (online available at most banks)
- Invest on the 1st-5th of each month to maximize interest
- Max out ₹1.5L/year if possible (₹12,500/month)
- Set up auto-debit so you don't miss a month
Strategy: Pair PPF with equity SIPs — PPF for safety, SIPs for growth.
Plan your tax savings
Ask Corpus how PPF fits into your overall tax-saving and retirement strategy.
Ask Corpus →Disclaimer: This is educational content, not investment advice. Returns and tax rules are indicative and subject to change. Consult a SEBI-registered advisor for personalized guidance.