PPF vs. bank deposit Vs post office deposits. Where should you invest?
If you have a handsome amount of money in your hand and are thinking of investing this money in fixed deposits that is FDs, and public provident funds (PPFs). First, you must understand these investment options.
Small savings schemes have their benefits and limitations. You can get fixed returns on your investments but have a lock-in period, where you have to keep your money for a fixed time period.
Small saving schemes help people save money, which can become a retirement Corpus. You can open an FD or PPF account with the post office or any other bank.
Interest rates have increased to the highest level in the country. Fixed-income instruments have become attractive investment avenues. This includes Bank FD, PPF, post office time deposit, and Senior citizens saving scheme.
Senior citizen saving schemes provide an 8.2% interest rate per year, whereas Bank FDs give giving 7.75% rate per year, and post office time deposits give up to 7.5% per year as an interest rate annually.
Among all large banks, HDFC Bank is offering a 7.75% interest rate on FD and it depends upon deposit years and deposits age.
Where SBI is providing FD rates up to 7.5% annually and PNB is giving 7.75% interest rate per year
The interest rates on the small saving schemes range between 4% to 8.2% annually. The senior citizen saving scheme has the highest rate of interest annually which is 8.2%.
As per government provisions interest rates on various schemes can vary yearly. Small saving schemes like a PPF have benefits of tax exemptions EEE status which means tax benefits on investment and withdrawal of your money.
if you compare the post office FDs and the PPF account post office gives the more interest rate on the lower time frame that is for 5 years, and the PPF public provident fund currently gives a 7.1% interest rate and has a 15 year lock periIf.
If you are investing in the PPF account your money you should keep for the 15 years and then only you can get interest rate annually.
Post office time deposit you can invest up to 3 years or 5 years and it also offers a good interest rate but it doesn't give you the benefit of tax exemptions like a PPF.
Post office FD investments are flexible. Premature withdrawal is only possible after completing the five financial years the from account opening date.
Even the many additional conditions will be availed on the PPF account on loan facility and premature withdrawal of your money. Where premature withdrawal facilities in the post office FDs are easier and flexible.
Here you can select any of these schemes according to your needs and time. If you want to invest your money for a smaller period then you can go for post office FD or recurring deposit.
And if you don't need your money for a longer period of time and if you are investing for the retirement goal then you can go for the PPF account as it has the tax-free maturity amount.
