What generally tends to put investors off is the long tenure of the Public Provident Fund, or PPF account.

The PPF account has to be held for 15 years, and then can be extended in blocks of 5 years. However, the 15 years are calculated from the end of the year in which the initial subscription was made. In reality that translates to 16 years.

This can work to the investor's benefit as a smart savings tool. The money is locked in – which makes it an excellent long-term savings tool, you get a tax break, the interest-free return is compounded annually and not taxed. This is a great way to accumulate money for a goal.

For instance, if you are 30 years old when you open an account, on maturity the money could come in handy for your child's higher education. If you are viewing it as a retirement kitty, then on maturity, extend it by a 5-year block. Or, if you are your spouse are each managing your own PPF accounts, one account can be used for retirement savings, the other for another goal – such as child's education or marriage.