The lock-in period of my PPF account is ending soon. Should I extend it by another five years?
Vishal Krishna, Mumbai
Over the past few years, the guaranteed returns on the PPF are on a decline and it is currently 7.9 per cent for the year 2017-18. In such circumstance, you need to ask yourself if you wish to continue putting money into a scheme in which the returns, though guaranteed are on a decline. The PPF is still a good tax saving option, but there are other tax saving options that you could choose from, which though do not guarantee returns, but are found to be better in the long run. The equity linked savings scheme or ELSS is one such option, which is nothing but a mutual fund, which comes with a three year lock-in, which is the shortest among the available tax savings options. Considering your intent to extend the PPF account by five more years, you could instead try investing money in ELSS. You could look to options like Franklin India Taxshield or Axis Long Term Equity, which feature in the OLM Elite list to invest in.
