Public Provident Fund
Providing a provident fund account is a mandate on organizations from the government of India. This is to ensure the normal working class person has some money in their accounts when they retire. Or they have some mandatory savings to their credit. This would be of a great use during the rainy days in their life. And the employer also has to contribute an equal amount towards the Provident fund of the employee.
But there are certain small organizations that are financially not sound enough to pay such benefits to the employees. Thus considering the fact there are certain small organizations that have been exempted from the mandate of having to provide a provident fund account to their employees. So for such people there is another scheme run by the government of India called the Public Provident fund.
The Public Provident Fund scheme is run by the State bank of India or by a post office. The scheme is also one of the best for tax saving purpose. The minimum amount that can be deposited is Rs.500 to a maximum of Rs.70,000 in a year. You might be interested to know that this limit has been fixed by the Provident Fund Act and the Income tax has got nothing to do with it. A per annum 8% interest is paid on the savings and all the interest earned in it is also tax free under sec 80C. Plus there is a tax benefit provided for the total amount of deposits made in it.
The PPF account has to run for 15 years from the year it was opened and the full amount may be withdrawn at that point of time. This is one of the safest and secured investments in the market as on date as your money is with the Indian government.