It is a traditional scheme of the Government of India often used by tax payers to save tax up to 1,50,000 INR u/s 80c of the Income Tax Act. The lock in period of the scheme is as long as fifteen years and can be extended in block of five years after maturity. Partial withdrawals can be made on the commencement of the seventh year. The scheme mostly invests in both government and corporate bonds and securities and is a debt scheme.
While the risk is low in PPF, the returns are not at par with that of ELSS. For Example – If you would have invested Rs. 150,000 per year in PPF for last 15 years, then you would have got a maturity value of Rs. 46.98 Lacs against your total investment of Rs. 22.50 Lacs. Whereas, with same investment amount (thru SIP of Rs.12,500 for 180 months/ 15 years) in ELSS, you would have got a maturity value of Rs. 150.91 Lacs and 171.95 Lacs respectively from Franklin India Taxshield Scheme and ICICI Prudential Tax Plan (both, ELSS Schemes). As you can see the difference of return between the two products is more than a crore! (Please note that we have taken only two schemes to show the returns, the list is exhaustive and returns will vary from one scheme to another)