EPFO has maintained the interest rate for 2009-10 on EPF funds at 8.5%. ( EPF- Employee Provident Fund - normal 12% deducted from basic + 12% employers contribution)
If you are a person who looks at stocks as very volatile and are looking for good fixed income returns, increase your EPF contribution ( Voluntary contribution which most of the employers allow). This would ensure that your money earns a tax free return of 8.5%. With the declining Fixed deposit rates , this seems to be a good option. Fixed deposit returns have almost come down below 8% (with a slightly downward potential). Again , your Fixed deposit interest is not tax free. PPF with 8% tax free return would be the next best option to consider for , if you are not keen /able to increase your EPF contribution. Both of these investments (EPF/PPF) can get you deductions under 80C ( upto 1 lakh) and generate a handsome tax free return.