Public Provident Fund (PPF) is a long-term savings scheme established by the Government of India to encourage savings among residents. It is particularly aimed at individuals seeking a secure investment option that offers tax benefits and a fixed rate of interest. Operating for a tenure of 15 years, the PPF allows individuals to open an account with a minimum deposit and makes contributions on a periodic basis, which can be made monthly, quarterly, or annually. The funds in a PPF account earn interest, which is compounded annually and is exempt from income tax. One of the key features of the PPF is that it provides a guarantee of capital and returns, making it a low-risk investment choice. Withdrawals are allowed subject to certain conditions after the completion of specific lock-in periods, and the account can also be partially withdrawn after a certain number of years. The PPF supports financial planning for future needs, such as education, retirement, or other significant expenditures.
Assess your risk tolerance before deciding between municipal bonds and PPF. Municipal bonds offer higher interest rates but depend on local municipalities' financial stability. The Public Provident Fund (PPF) provides…