PPF Investments has been the most talked about savings vehicles in India and the fact that it is said to be safest investments that can give you tax benefits every year, has helped it remain the top-notch tax-efficient investment option.

That said, there are people who are hesitant towards making PPF Investments due to the long lock-in period it comes with and when it comes to deductions under Section 80C of the Income Tax Act, although it offers up to Rs 150,000 worth of deductions, when it comes to returns, it hovers between 7-8%.

But this is how Public Provident Fund is meant to be. The PPF Investments is a long-term, small savings scheme backed by the government which was started with the objective of offering social security during retirement, especially to those in the unorganized sector as well as for self-employed individuals.

Since it is backed by the government, people tend to invest a large sum of their money in PPF while trying to earn more returns from other schemes like Equity Linked Savings Scheme (ELSS) and Mutual Funds.

But before making any PPF Investments it is recommended to know whether it suits your needs rather than opting for it just because it is considered safe.

Opt For PPF, If,

  • You can’t afford to take risks and wants maximum security for your investments.
  • You can wait for 15 long years while also investing regularly.
  • You are near to your retirement age.

Having said that, this is something a portfolio manager will tell you to do, however, it’s you who have to make the final call and for that, you need to know everything about PPF Investments and whether it suits you or not.

For that, here are different parameters on which you can understand Public Provident Fund, better.

The Risk Involved

PPF Investments are considered safe since they are backed by the Government of India.


Rate of interest for PPF is announced by The Government every year. It usually hovers between 7-8% p.a.

Tax Benefits

PPF investments come under EEE (exempt-exempt-exempt) tax status which means that the interest earned or proceeds received at the time of investment, accumulation and withdrawal are all tax-free or exempted.

Lock-In Period

It comes with a lock-in period of 15 years but partial withdrawals are permitted from the 6th year. Also, you can take a loan against your PPF Investments from the third year of opening an account up to the sixth year.

Investment Limit

An investor can invest any amount between ₹500 to ₹150,000 in a particular financial year, with options of either doing a lump sum payment or opting for 12 installments.

Everything said and done, PPF Investments suit those who do not want volatility in their returns like the equity asset class. However, for long-term goals and when the inflation-adjusted return is high, an investor should take some equity exposure, through equity mutual funds or ELSS (Equity Linked Savings Scheme) tax saving funds.

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