When Budget 2014 raised the deduction under Section 80C from `1 lakh to `1.5 lakh, it also hiked the annual investment limit in the Public Provident Fund (PPF). Risk-averse investors can now sock away more in this ultra-safe scheme.

The PPF scores high on safety, taxability and costs, but the returns are not so attractive and liquidity is not very high. The scheme will give 8.7% this year, but don't count on it in the following years. The interest rate on small savings schemes like the PPF is linked to the government bond yield and it is likely to come down in the coming years.

Though it is a 15-year scheme, the money isn't locked for this period. You can make partial withdrawals from the sixth year or take a loan. The interest rate on a loan is 2 percentage points higher than the prevailing PPF interest rate. For 2014-15, the rate will be 10.7%. Besides, the lock-in period depends on how long ago you opened the account. For those who started investing in the PPF 10-12 years ago, the effective lock-in period will be only 3-5 years.

You can extend your PPF account for blocks of five years even after the scheme matures. An account can be opened in a post office or at designated bank branches. Some banks even give online access to the PPF account. It's a useful feature that will reduce the effort to invest in the scheme.