Recurring Deposit Vs Public Provident Fund

There are times when you donít want to invest lump sum but in instalments & wish to get attractive interest rate with safety of your investible funds. On such occasions, bank RD as well as PPF can be among your various choices.

Bank RDs are offered by public sector banks, private sector banks, co-operative banks, foreign banks, regional rural banks etc. Here, you are required to invest in regular instalments which are pre-decided by you. Multiple tenure having different interest rates are there with the banks which you can opt for according to your need.

PPF gives you option to either invest in instalment or in lump sum. It is very flexible instrument where no compulsion is there. You can choose the amount of investment and when to invest as per your convenience. The only thing to remember here is that the minimum amount of investment per year is Rs 500/- and maximum is Rs 150000/- per annum. You will get tax rebate too on your investment.

Listed below in the table are all the differences between Bank RD and PPF:

Difference Between RD and PPF

Basis of DifferenceBank Recurring Deposit (RD) Public Provident Fund (PPF)
ObjectiveTo induce a habit of regular saving
Vs
To avail tax rebate under sec 80C of
Income Tax on deposits with guaranteed
returns on investment
MeaningAn account in which the investor needs
to deposit the pre-specified amount at
periodical intervals for a long term
Vs
A long-term saving instrument
established by the central government
which generates tax-free maturity to
provide the old-age income security
Investible amountIn instalments- usually monthly
instalments
Vs
Investments in smaller and unequal units
or in lump sum can be deposited to PPF
account
Maximum Investment Amount
no such limit
Vs
Rs 150,000 per year
Interest RatesVaries from bank to bank- dependent upon
tenure
Vs
Fixed- presently 8.1% p.a.
Interest Rates
Compounding
Quarterly
Vs
Annually
Interest earned is
taxable
Yes, as per investor's income tax slab
Vs
No
LiquidityYes
Vs
No
Tenure6 months to 10 years
Vs
15 Years, can further be extended in
multiples of 5 years
Income Tax Rebate u/s 80CNo
Vs
Yes, upto Rs 1,50,000/- p.a.
MaturityTaxable
Vs
Tax Free
Premature WithdrawalsEntire amount, anytime but after
charging a certain penalty , banks
generally charge 1% as penalty. Partial
withdrawals are not allowed
Vs
Can be withdrawn from 7th financial year
onwards from the opening of the account
and only one partial withdrawal is
allowed every financial year
LoansLoan facility available upto 90% of the
deposit value in the RD where the RD
needs to be pledged as collateral and
the interest rate to such loan is around
0.5% to 2% higher than the fixed deposit
rate
Vs
Loan availibility from third year
onwards
Tax Deduction at SourceYes, at the rate of 10% on interest
earned, if it exceeds Rs. 10,000 in one
financial year. To avoid TDS, investor
can submit Form 15G (for age below 60)/
Form 15H (for age above 60).
Vs
No
RiskRisky compared to PPF
Vs
Safest Investment
Periodic incomeNo
Vs
No

Upcoming Bank Holidays

2017 February 24 is a bank holiday in Chandigarh due to Mahashivratri.
2017 February 27 is a bank holiday in Sikkim due to Losar.
2017 March 03 is a bank holiday in Mizoram due to Chapchar Kut.
2017 March 12 is a bank holiday in Jammu And Kashmir due to Holi (Jammu Province Only).

 Quick IFSC Search
 
 Quick BSR Search
 
 Quick MICR Search
 
ALL INDIA BANKS LIST
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