Public Provident Fund (PPF) is a government-backed tax-free savings scheme with a 15-year lock-in period. Interest is calculated monthly but compounded annually.
Where: P = Yearly investment, r = Annual interest rate, n = Number of years.
If you invest the maximum allowed amount of ₹1.5 Lakhs every year for the full 15-year lock-in period at a constant 7.1% interest rate. Your total investment of ₹22.5 Lakhs will mature into a massive, completely tax-free sum of ₹40,68,209.