Fixed deposit vs Public Provident Fund - Which is Better

Should you invest in a Public Provident Fund or Fixed Deposits?

As convenient and safe form of savings, we look to invest either in Public Provident Fund (PPF) or Fixed Deposit (FD). Although both are investment instruments, the differences between PPF and FD are substantial, and each comes with its own set of features that make them unique for customers.

Features and Benefits of PPF and Fixed Deposits

Here’s a brief comparison of different aspects of PPF and FDs:

1. Tenors

With PPF, the amount you invest will be locked in for 15 years. PPF doesn’t offer any other tenor to customers, so their amount remains locked in for 15 years.

Bajaj Finance offers you FD tenors ranging from 12 to 60 months. Thus, you get the flexibility to choose the investment period for FDs, which you cannot with a PPF.

2. Premature withdrawal

When you invest in a PPF, you get to withdraw the amount only after completion of the 5_th year and that too, up to a limited amount.

Bajaj Finance enables you to withdraw an FD prematurely at any time. You can also avail a loan against your Fixed Deposits.

3. Tax benefits
Earn tax benefits on both PPF and FD under Section 80C. In case of FDs, you have to invest the amount for a minimum period to avail the income tax benefit.

4. Loans
You can avail loans against your PPF only after the completion of the 3^rd year. However, you can get a loan against FD at any point of time.
Get loans up to 75% on cumulative FDs and up to 60% on non-cumulative FDs, when you invest in Bajaj Finance Fixed Deposits.

5. Deposit amount
The maximum amount deposited with a PPF is limited to Rs. 1.5 Lakh per year. With FDs, there is no fixed limit.
In this case, if you ask – PPF or FD which is better, the answer will be FD.

6. Rate of interest
The rate of interest for PPF is set by the Government while that of FD is set by the individual bank or NBFC.
As FD comes with more flexibility, it is the winner in this PPF vs FD battle. Invest with a minimum of Rs. 25,000 in Fixed Deposit with Bajaj Finance and get FD interest rates up to 8.35%. Senior Citizens will get 0.25% more, and you can even get 0.25%.

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