If you have to decide on an investment between the Public Provident Fund (PPF) and bank deposits, we suggest you go in for the latter. Here are 7 good reasons why PPF is better than bank deposits:
Interest rates The interest rates on the Public Provident Fund is always likely to be better than bank deposits, although there is a revision every quarter. Currently, PPF gives you an interest rate of 8.1 per cent, while you get a mere 7.5 per cent in public sector banks.
Interest rates The interest rates on the Public Provident Fund is always likely to be better than bank deposits, although there is a revision every quarter. Currently, PPF gives you an interest rate of 8.1 per cent, while you get a mere 7.5 per cent in public sector banks.
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Taxation on interest Bank deposits is fully taxable. The interest earned on them is added to the total income of a person for the purposes of paying tax. The interest earned on the PPF is tax-free.
Sec 80C Tax benefits If you invest up to Rs 1.5 lakhs, you get tax benefits under Sec 80C for the PPF. Most of the bank deposits do not offer you this facility unless it is the tax saving deposits.
Sec 80C Tax benefits If you invest up to Rs 1.5 lakhs, you get tax benefits under Sec 80C for the PPF. Most of the bank deposits do not offer you this facility unless it is the tax saving deposits.
Helps to build retirement corpus Due to its long tenure of 15 years, the PPF helps you to build a solid retirement corpus.
Easy liquidity The one advantage of the bank deposit over the PPF is that it is more liquid. It can be en cashed before expiry, which is not available in the PPF. Partial withdrawal is allowed only after 7 years in the PPF.
Source from goodreturns
Easy liquidity The one advantage of the bank deposit over the PPF is that it is more liquid. It can be en cashed before expiry, which is not available in the PPF. Partial withdrawal is allowed only after 7 years in the PPF.
Source from goodreturns
