Public Provident Fund ( PPF )- A must have in your long term portfolio.

If you are working in PSU or a reputed pvt company you might have a very good EPF / VPF contribution towards your retirement corpus. But I think still it is wise to go for a PPF a/c investment. In short it gives you very powerful & time tested way to create a good amount of wealth for you. Earlier 70,000 Rs was max limit for investment in one year for an individual. Now that limit is increased to 1,00,000 Rs but the minimum amount for a year remains 500 Rs to continue the account. Now what are the USP of this instrument, that you should opt for a PPF a/c. Let's see one by one -

1) Long term savings instrument, which currently gives you 8% rate of interest. And it unlikely to change in near future.

2) EEE (Exempt, Exempt, Exempt) in tax perspective. Tax benefit during investment in each year. No TDS on interest accrued. And no taxation on final return. Very less number of products today, has such an advantage.

3) Though the lock in period is 15 years, you can get a partial withdrawal from it after completion of 5 years.

4) If someone wants to continue after a period of 15 years, then this can be increased in a block of 5 years.

5) You can use it for your children’s' future finance requirement. In fact you can open a PPF a/c in your child's name and invest money with a tax exemption on that. Though it comes under 80C and if you have your own PPF account, then you can get a maximum up to 1,00,000 Rs tax benefit from two accounts together ( You + your minor child).

So, a PPF account is must in your long term financial planning list.