PPF: The Safest Long-Term Wealth Builder

What is PPF?

The Public Provident Fund (PPF) is a government-backed long-term savings scheme in India with a 15-year lock-in. It's one of the few investments that enjoys EEE status — contributions, interest earned, and maturity are all tax-free.

Key Rules

Minimum deposit: ₹500/year
Maximum deposit: ₹1,50,000/year (aligned with Section 80C limit)
Lock-in: 15 years (extendable in 5-year blocks)
Interest rate: Reset quarterly by the government (currently 7.1% p.a.)
Tax benefit: Deduction under Section 80C up to ₹1.5 lakh

The PPF Formula (annual contribution at start of year)

FV = C × [(1+r)^n − 1] / r × (1+r)

Worked Example

Maximum contribution (₹1.5 lakh/year) for 15 years at 7.1%:

Total invested: ₹22.5 lakh
Maturity value: ~₹40.68 lakh
Tax-free gain: ~₹18.18 lakh

Should You Extend After 15 Years?

Yes — if you don't need the money. You can extend in 5-year blocks, with or without contributions. The compounding on a ₹40L+ corpus is significant.