InvestmentFinancial Glossary
PPF (Public Provident Fund)
Definition
A government-backed long-term savings scheme with a 15-year lock-in period (extendable in 5-year blocks). It currently offers 7.1% annual interest, compounded yearly, reviewed quarterly by the government. Minimum annual deposit is Rs 500; maximum is Rs 1.5 lakh.
Why It Matters
PPF has EEE (Exempt-Exempt-Exempt) tax status — contributions get Section 80C deduction, interest is tax-free, and maturity is tax-free. For risk-averse investors in the 30% tax bracket, the effective pre-tax yield is over 10%. PPF is often the cornerstone of conservative Indian portfolios.