PPF Vs FD: Generally, there are many investment schemes in the market, but choosing a better scheme can be a difficult task, hence even today people rely on government schemes like PPF or FD.
Both these schemes are away from market risk. If you also want to invest in any one of the Government’s Public Provident Fund Scheme or FD Scheme, then we will tell you which option is better for you.
Public Provident Fund Scheme (PPF)
You can invest in this scheme for 15 years. After 15 years tenure, you can extend the scheme 3 times in blocks of 5 years. You can invest a minimum of Rs 500 and a maximum of Rs 1.5 lakh in this. At present, 7.1 percent interest is being given on the amount deposited in this scheme. In this scheme, PPF pre-mature closure can be done with certain conditions. In this, both your income and maturity amount are tax free under Section 80C of the Income Tax Act, 1961.
Fixed Deposit (FD)
Fixed Deposit (FD) of banks is one of the reliable and safe investment options. You get the facility to invest in FD for 7 days to 10 years. No matter what the market conditions are, you get fixed interest on your deposits. Fixed deposits get more interest than savings accounts. State Bank of India is giving interest ranging from 3% to 7.10% to general public and 3.50% to 7.60% to senior citizens.
What is better for you?
If seen from investment point of view, both these options are better. But if we look at the interest rate, currently PPF scheme is giving more interest than FD. If you give priority to long term retirement savings along with tax benefits, then PPF can be the best option for you. But if you want to get guaranteed returns with flexibility then FD is a good option. PPF is a government scheme, it has a locking period of 15 years. If you want to withdraw money after maturity, then this permission is given only after 6 years.
