Definition of PPF (Public Provident Fund)
The Public Provident Fund (PPF) is a government-backed long-term savings scheme in India offering guaranteed returns and full tax exemption under the EEE (Exempt-Exempt-Exempt) category — meaning the investment, returns, and maturity amount are all tax-free.
Key features: 15-year lock-in period (extendable in 5-year blocks), maximum deposit of ₹1.5 lakh per year, current interest rate around 7.1% per annum (revised quarterly by the government), and partial withdrawal allowed from year 7. The interest rate is set by the government and is relatively stable.
PPF is popular for conservative, tax-efficient long-term savings. However, the 15-year lock-in and ₹1.5 lakh annual limit make it a complement to — not a replacement for — equity investing via SIP or mutual funds for long-term wealth creation.