ELSS Vs. PPF Vs. FD – Which one better?

It can be a struggle to choose amid various investment options – to compare their features and decide what is better. This article will help you make a decision.

Equity Linked Savings Scheme (ELSS)

It is a type of equity mutual fund which invests primarily in equity and equity-related instruments under Section 80C of Income Tax Act 1961. In this, it is possible to invest as low as Rs. 500 using the Systematic Investment Plan. It has a high potential of giving returns, dependent on the Indian stock market performance. ELSS fund comes with a compulsory lock-in of 3 years after the date of investment. One should only invest in ELSS if they have apt knowledge of the market and higher risk appetite. It is a fitting option for those who do not want to be a part of the equity market directly but still want to invest.

Public Provident Fund (PPF)

It is a government-guaranteed savings scheme with a lock-in period of 15 years. One can deposit a minimum of Rs. 500 and a maximum of Rs. 1.5 lakhs per year under this scheme. Returns are fixed as they are set by the Indian government every quarter. It comes with the option of partial withdrawal after the expiry of the first 5 years. The risk factor is low, and interest on PPF is tax-free. PPF is a favourable option if looking for a long term investment scheme, for instance, while planning your retirement plans. You can open a PPF account with the post office and most of the major banks.

Fixed Deposit (FD)

It is a type of deposit where an investor puts in a specific sum of money for a fixed tenure and interest rate. It arrives with a lock-in period of 5 years. There are two types of fixed deposit: Regular and tax-saver. Regular FDs do not offer tax benefits. Only tax-saver FDs provide tax benefits. With a tax saver FD, depositors can claim withdrawal of up to Rs. 1.5 lakhs in Section 80C of the Income Tax Act. The most einthusan tv significant advantage that an FD has is that there is almost no risk involved and customers are guaranteed returns. You can make a higher rate of interest in comparison to a regular savings account. An investment through a fixed deposit has been a common choice in India and seems to be the safest and most promising investment option.

PNB Housing offers safe, secure and higher returns on fixed deposit account at 7.95%. They provide one of the best fd interest rates in India, ranging from 5.00% to 6.75% for general citizens and 5.50% to 7.25% for senior citizens. Visit their website for more information.