PPF or Public Provident Fund is a type of debt investment from the government which can give around 7.5% interest. The best part is that it offers tax free returns. PPF actually helps people to invest in small quantities too. Till the last year when the Old tax Regime was there people used to save in PPF for their 80C.
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Now with the new tax regime where most of the people will opt for New Tax Regime, people will not invest in the PPF. But I feel it is a better option now. The only problem is that it has a lock-in period of 15 years. So if you have started investing it will take 15 years before you can withdraw it. So this is the only catch otherwise it is one of the safest option out there as it is from the government.
A lot of people asks whether the PPF is still good or not. I feel if you are saving in the debt fund then PPF Is good because it is tax free, whereas for the debt mutual fund you have to pay tax as per your income tax slab. So if you have a long term horizon for the investment in debt fund then you can invest in the PPF. But I would not suggest you to invest a lot of amount there because you will get only 7.5% returns whereas the equity will give you more than 12% in the longer run.
So if you are investing 20% in debt, then I would suggest 10% in PPF and other 5% in FD and other 5% in Debt Mutual Fund. FD because it is the most liquid form of debt invetmnet. Then debt mutual fund which can give you money in 2-3 days and then the PPF which actually you will never withdraw ad keep it for the longer run.
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