Why PPF account is important for early in professional life

I am writing this because I felt , I dint got this advice when i was new to professional life

There are many reason why PPF account is considered best with very good return. 

When income of an professional reach to a level where he has to pay tax , then he start thinking about where to invest the money so that he can get the Tax benefit under section 80C.

What in general a fresher does 

1. Buy NSC (National Saving Certificate) - return on maturity Taxable

2. Buy ELSS mutual fund - return on maturity Taxable and risky being invested in market

3. Buy ULIP (Unit linked investment plan) - very expensive and risky because invested in market 

4. Buy LIC  :-return is very less , most of money goes for motility coverage 

5. Buy Fixed Deposit 5 year locking - return on maturity Taxable 

Both above these have disadvantages of as  NSC being as taxable on maturity and ELSS is being risky on market condition and so on.... 

Advice to  open PPF account is least available to freshers in the industry.

Advantages of PPF:

1. This is account with government so it is safe investment 

2. Current rate of interest is 8.5

3. One can invest 500Rs to 1L Rs  annually , minimum 500 to keep it active 

4. Money is saved for 15 years

5. Loan can be avail on deposit balance

6. Most important is return on maturity is tax free , that when one is in highest tax bracket 

7. Investor can deposit 12 times in a year , so from beginning of financial year every month  money can be deposited to reduce stress in March.

Let us take an simple example , an individual invest 1L every year in PPF account  for 15 years, let us assume she falls in 20% Tax bracket  on an average for 15 years .  

a. Total sum                                                                  15,00,000

b. Saving on tax  80C (20%)                                           3,00,000

c. Total amount earn on Maturity (@ 8.5%)                   30,90,109

d. Tax on maturity saved             (@20%)                   6,00,000

Total saving on maturity is 6,00,000. which is directly 20% more than any instrument. 

Investor should check every year with company account for the PF contribution so ideally she should invest in  "PPF = 1L - PF contribution" which will cover all 80C requirement.

Note : After later stage of professional life where PF contribution may cover entire 1L then PPF may not give the 80C benifit but still maturity amount is tax free , so it make more sense to open PPF account early and save more.