Investment in different avenues generally depends upon the objectives of the investors such as amount of investment, tenure, returns, taxability, risk bearing capacity etc. Though there are many choices of investment available in the market, Bank FD and PPF are ideal for those who have a lower risk appetite.
As a long-term saving instrument PPF, backed by the Government of India, provides not only guaranteed returns but also generates tax-free maturity, is the best suited for those investors who require the old-age income security. It is the ideal option to the people whom safety of capital is of utmost importance.
If a person who is risk averse but does not want a lock in of his funds and also wants better returns then FD is the best alternative in which the investor needs to make a lump sum investment for a fixed tenure and on this invested amount, banks offer you to get a fixed interest periodically till the end of the term or you may directly get whole interest along with the principal at the time of maturity. FDs of nationalized banks are considered as highly secured instruments.
Still there may be many questions in your mind as to where to invest between FD and PPF, we have tried to compare both these instruments in order to answer maximum questions in the table given below:
|Basis of Difference||Public Provident Fund (PPF)||Bank Fixed Deposit (FD)|
|Maximum Investment Amount||Rs 150,000 per year|
|No such limit|
|Interest Rates||Fixed- presently 8.1% p.a.|
|Variable- from 7 to 9% based on term|
|Interest earned is|
|Lock in Period||15 Years|
|7 days to 10 years|
|Income Tax Rebate u/s 80C||Yes, upto Rs 1,50,000/- p.a.|
|Yes upto Rs 1,50,000/- p.a., but on FD|
with a lock in period of 5 or more years
|Premature Withdrawals||Only partial amount, after the 5th year|
and subject to a limited extent only
|Entire amount, anytime but after|
charging a certain penalty
|Loans/Overdraft||Loan from third year onwards|
|overdraft facility upto 90% of the|
amount in the FD
|Tax Deduction at Source||Nil|
|Yes at the rate of 10% on interest|
earned if if it exceeds Rs. 10,000 in
one financial year
|Risky as compared to PPF|
2017 January 26 is a bank holiday in Andaman And Nicobar Island due to Republic Day.
2017 February 01 is a bank holiday in Andaman And Nicobar Island due to Saraswati Puja (Shree Panchami)/Basant Panchami.
2017 February 10 is a bank holiday in Chandigarh due to Guru Ravidas's Birthday.
2017 February 15 is a bank holiday in Manipur due to Lui Ngai-Niw.
|AB Bank Ltd||ABN-AMRO Bank N.V||Abu Dhabi Commercial Bank||Airtel Payments Bank Limited||Allahabad Bank||American Express Banking Corp||Andhra Bank||Antwerp Diamond Bank NV||AXIS Bank||Bandhan Bank Limited||Bank Of America||Bank Of Bahrain & Kuwait B.S.C||Bank Of Baroda||Bank Of Ceylon||Bank Of India||Bank Of Maharashtra||Bank Of Nova Scotia||Bank Of Tokyo Mitsubishi Limited||Barclays Bank||Bharatiya Mahila Bank||BNP Paribas||Calyon Bank||Canara Bank||Catholic Syrian Bank Limited||Central Bank Of India||Chinatrust Commercial Bank Limited||Citi Bank||City Union Bank Limited||Corporation Bank||DBS Bank Ltd||DCB Bank Limited||Dena Bank||Deutsche Bank||Dhanalakshmi Bank||Equitas Small Finance Bank Limited||Exim Bank Export Import Bank Of India||Federal Bank||HDFC Bank||HSBC Bank||HSBC BANK OMAN SAOG||ICICI Bank||IDBI Bank||IDFC Bank Limited||Indian Bank||Indian Overseas Bank||IndusInd Bank||Jammu And Kashmir Bank Limited||JP Morgan Bank||JSC VTB Bank||Karnataka Bank Limited||Karur Vysya Bank||Kotak Mahindra Bank Limited||Krung Thai Bank Public Co. Ltd||Laxmi Vilas Bank||Mashreqbank Psc||Mizuho Corporate Bank Limited||Oman International Bank SAOG||Oriental Bank Of Commerce||Punjab And Sind Bank||Punjab National Bank||RBL Bank Limited||SBM Bank Mauritius Limited||Shinhan Bank||Societe Generale||Sonali Bank||South Indian Bank||Standard Chartered Bank||State Bank Of Hyderabad||State Bank Of Patiala||State Bank Of Bikaner And Jaipur||State Bank Of India||State Bank Of Mysore||State Bank Of Travancore||Syndicate Bank||Tamilnad Mercantile Bank Limited||The Nainital Bank Limited||UBS AG||UCO Bank||Union Bank Of India||United Bank Of India||Vijaya Bank||Yes Bank Limited|