PPF

What is it

PPF is a government savings scheme with the rare 'EEE' tax status — Exempt, Exempt, Exempt — meaning your deposit, the interest earned, and the final withdrawal are all tax-free. In exchange, your money is locked for 15 years (extendable in 5-year blocks). ₹1.5L/year for 15 years at 7.1% grows to roughly ₹40.7L, entirely tax-free.

Introduced in 1968, PPF remains one of India's most trusted long-term savings instruments precisely because of its EEE tax status — a rare feature after most other tax-saving instruments (like NPS) moved to partially taxable EET status over time.

Who it's best for

Long-term, ultra-safe savers building a retirement or child's-education corpus who don't mind a 15-year commitment.

Who should avoid it

You need meaningful liquidity in the next decade — partial withdrawals are limited and only allowed from year 7.

Pros

• Completely tax-free at every stage — deposit, interest, and maturity
• Government-backed, zero credit risk
• Partial loans/withdrawals available from year 3/7 respectively for emergencies

Cons

• 15-year lock-in is the longest among common 80C options
• ₹1.5L/year contribution cap limits how large a corpus you can build through PPF alone
• Interest rate is revised quarterly by the government and can fall over time