Fixed Deposit (FD) and Public Provident Fund (PPF) are the two most popular investment options in India. Many benefits and features are available in both these options.
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Fixed Deposit (FD) and Public Provident Fund (PPF) are the two most popular investment options in India. Many benefits and features are available in both these options. The risk in both the schemes is very less. Apart from this, the process of opening FD or PPF account is very simple.
People get the option of safe investment in both Fixed Deposit and Public Provident Fund. Investors get better returns on maturity. In which scheme to invest, it is decided on the basis of the individual’s own needs. There is flexibility in terms of investment tenure in Fixed Deposit. Apart from this, one does not have to wait for a period of three years to avail the facility of loan against FD.
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Where is the interest rate better?
The interest rate for this quarter of the current financial year in the Public Provident Fund is 7.1 per cent. On the other hand, in Fixed Deposit i.e. FD scheme, FD interest rates for general category start from 3 percent to 7 percent.
Apart from this, opening of joint account is not allowed in PPF. Whereas, joint account can be opened in FD scheme. People living in India can invest in PPF scheme. Whereas, Non-Resident Indians (NRIs), companies, trusts, Hindu Undivided Families (HUFs) and residents can invest in fixed deposits. Where the investment period in PPF is 15 years. At the same time, investment can be made in FD scheme from 7 years to 20 years.
Liquidity and other features
Liquidity is less in PPF. At the same time, liquidity in FD is better than PPF. At least Rs 500 can be invested in PPF. At the same time, the minimum investment in FD ranges from Rs 100 to Rs 1,000. A maximum of Rs 1.5 lakh can be invested in PPF in a year. At the same time, there is no limit on the maximum investment in FD.
Talking about tax benefits, there is complete tax exemption on investment in PPF scheme. Whereas, tax exemption can be availed on an amount of up to Rs 1.5 lakh in FD.