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    PPF Vs FD

    We spend a vast portion of our lives trying to make money, working long hours, putting in the extra effort just to make enough money to lead a decent life. Earning money can be a pretty mundane job on occasions, but we still do it, not only for our present but to secure our future as well. In a lot of cases, making the right investment choice becomes harder than actually earning the money itself, with people blowing up their hard earned money on wrong investments. These investments could make or break our future and it pays to choose them wisely. With respect to India, Fixed Deposits and Public Provident Fund (PPF) are two extremely popular investment options, each vying to attract investors with a slew of benefits and features.

    Fixed Deposits and Public Provident Fund can be considered as two sides of the same coin, offering multiple benefits while retaining their individual characteristics. So which option is better? Fixed Deposit or PPF? Here are a few points about both of them which might help solve the confusion.

    1. Maturity or Lock in Period – The Lock in period refers to the time duration before which an investment reaches its maturity. Public Provident Funds come with a maturity period of 15 years, an extremely long time period indeed. Fixed Deposits on the other hand can have lock in periods ranging from 7 days to 10 years, depending on the needs of an individual, thus offering more flexibility in terms of planning for the immediate future.
    2. Interest Rates – The interest rate on PPFs is fixed by the Government and only the government can change this rate. The current interest rate on PPFs stands at 8.7% per annum. The interest rates on Fixed Deposits are fixed by individual banks and an individual could stand a chance to get a higher interest rate by doing a quick survey. Most banks offer an interest rate ranging between 8.5-9% per annum, with some banks going higher, depending on the age of investors and the term period. Company Fixed Deposits offer higher interest rates, ranging anywhere between 12-13% per annum, but come with an element of risk attached to them.
    3. Premature Withdrawals – Premature withdrawal facility is available in case of PPFs, but only after the 5th year and subject to a limited extent only. Most banks allow premature withdrawals of fixed deposits but can levy a certain fine on such premature withdrawals, depending on bank policy.
    4. Loans – Emergencies can come knocking at any time and a loan can often quell the emergency temporarily. Loans can be obtained against PPF from the third year onwards. In case of Fixed Deposits, most banks offer an overdraft facility which can be as high as 90% of the amount in the FD. The interest is generally 2% points higher than the interest rate offered on the FD.
    5. Tax Deduction – Individuals can claim a tax deduction on certain investments under Section 80C of the Income Tax Act, with both Public Provident Fund and Tax Saving Fixed Deposits eligible for such deductions. The current maximum deduction available for both these investments stands at Rs 150,000 (One lakh fifty thousand) per annum.
    6. Investment Amount – The maximum amount an individual can invest in PPF is limited to Rs 150,000 per year, which makes PPFs lose out on individuals who wish to invest higher amounts. There is no such limit when it comes to investing in Fixed Deposits, with certain banks accepting investments in crores, depending on the individual bank policy.

    FD or PPF? Where to invest?

    Both Fixed Deposits and Public Provident Funds offer an extremely safe investment opportunity to individuals, offering decent returns on maturity. The choice of investment boils down to individual requirements, with Fixed Deposits trumping Public Provident Funds in terms of flexibility in term periods and slightly higher interest rates. The fact that individuals can avail loan facilities against Fixed Deposits without having to wait for the three year period as is the case with PPFs makes them a better short term investment option.

    Individuals who wish to have both a short term and a long term investment option can choose to invest in both Fixed Deposits and PPFs, provided they have the luxury of time on their side.

    How to open a Fixed Deposit Account or Public Provident Fund Account?

    Investors have the option of choosing between two kinds of Fixed Deposits, Bank Fixed Deposits and Company Fixed Deposits. Bank Fixed Deposits can be opened with any bank which offers this facility with benefits including overdraft facility, lock in periods to suit individual needs, etc. All an individual has to do is fill out the application form and submit it to the bank, along with the necessary documents.

    Company Fixed Deposits are offered by companies wherein investors can deposit money with the company for a fixed time period. These Fixed Deposits offer a higher interest rate but are considered risky, with returns highly dependent on the company’s performance. Company Fixed Deposits can be opened easily by filling out the application form and providing the relevant documents.

    A Public Provident Fund Account can be opened in post offices and select nationalized banks. Individuals need to fill out the application form and submit the relevant documents to open this account. The account can be transferred from the post office to the banks by just submitting a request for the same.

    Conclusion

    It takes a lifetime of hard work to earn money but a single moment of recklessness can see it disappear. Investing in Fixed deposits or PPFs ensures that our hard work doesn’t go to waste and our money continues to grow stronger, so that it can be there for us when we truly need it. The benefits offered by both FDs and PPFs are unique, and not investing sensibly could very well signal the start of a rapid downhill journey.

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    Fixed Deposit Vs Public Provident Fund Reviews

    • HDFC Bank Fixed Deposit
      "Excellent services"
      0.5 4.5/5 "Excellent!"
      The best bank for a fixed deposit is HDFC Bank. The customer support is good and they are responsive as well. They offer an interest like other bank on my savings. The best is there is no lock in period so I close this account when ever I want too and I can do it with just a click away online. Where as other banks they would ask me to go to the home branch.
      Was this review helpful? 1
      , new delhi
      Reviewed on Apr 16, 2019
    • review Fixed Deposit
      "Good interest on savings"
      0.5 5.0/5 "Blown Away!"
      I also have a fixed deposit with Saraswat Cooperative Bank. The customer support is good and they are responsive. I been a customer for 20 years. The interest they provide on my savings is more than satisfactory and there are no charges taken for this account features.
      Was this review helpful? 0
      , mumbai
      Reviewed on Apr 15, 2019
    • SBI Fixed Deposit
      "Less interest rate"
      0.5 5.0/5 "Blown Away!"
      Two months before I deposited my money nearly 1,50,000 in SBI . I am really happy with their customer service and response . But the interest rate is around 6.85 % which is lesser comparing to other bank . Since It is Government bank, I need not to worry in future if anything uncertain happens .
      Was this review helpful? 1
      , chennai
      Reviewed on Apr 15, 2019
    • Central Bank of India Fixed Deposit
      "Excellent service"
      0.5 5.0/5 "Blown Away!"
      I have done fixed deposit on CENTRAL BANK OF INDIA an year ago, i did not face any issue in creating account. They have given me limited tenure period, i use to pay my payment through my credit card of same bank, now i have withdrawn my deposit. I got good interest rate so far my experience was good.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Apr 15, 2019
    • Citibank Fixed Deposit
      "Satisfactory"
      0.5 5.0/5 "Blown Away!"
      I also have a fixed deposit with Citibank. I could get the clear details online. Though I would not be able to open this account through the mobile application. I can do it through the desktop. It has been a good experience till date and beneficial too.
      Was this review helpful? 0
      , mumbai
      Reviewed on Apr 15, 2019
    • SBI Fixed Deposit
      "Good in all"
      0.5 5.0/5 "Blown Away!"
      I also have a fixed deposit account with State Bank of India. The customer services are good. The process can be done online. The lock in period depends on the choice of the customer. The minimum tenure is six months. The interest rate provided is also equally good.
      Was this review helpful? 3
      , new delhi
      Reviewed on Apr 13, 2019
    • Bank of Baroda Fixed Deposit
      "Overall no hassles"
      0.5 5.0/5 "Blown Away!"
      It is a very simple process to open a fixed deposit account with Bank of Baroda. The lock in period is for five years. They provide a very good interest on my savings. The process at the bank is also good. There are no hassles in the overall experience.
      Was this review helpful? 0
      , faridabad
      Reviewed on Apr 12, 2019
    • SBI Fixed Deposit
      "Looking for More Investment"
      0.5 5.0/5 "Blown Away!"
      Five years before , I opened a Fixed deposit in SBI , It automatically renewed on every year. I just monitors in online . I am looking for more investment in the future. At one stage I open this fixed deposit for my children's education or marriage .
      Was this review helpful? 1
      , secunderabad
      Reviewed on Apr 10, 2019
    • Federal Bank Fixed Deposit
      "Good customer support"
      0.5 5.0/5 "Blown Away!"
      In Federal bank , for Recurring deposit they provide very good interest rate of almost 7.5% .Even it is applicable for shorter period and longer term also . Very good customer support . After comparing with other banks , I decided to start my FD in Federal bank .
      Was this review helpful? 1
      , kochi
      Reviewed on Apr 09, 2019
    • review Fixed Deposit
      "Overall good"
      0.5 5.0/5 "Blown Away!"
      I hold a fixed deposit account with City Union Bank. The rate of interest is of 7.25% on my savings. The customer support is good and they are responsive as well. It was easy to open this account and I can do it online. There are no hassles in the overall service.
      Was this review helpful? 0
      , chennai
      Reviewed on Apr 05, 2019
    • ICICI Bank Fixed Deposit
      "Good Accesibility"
      0.5 5.0/5 "Blown Away!"
      My fixed deposit with ICICI, I have opened the account through online just from the I mobile. I invested around Rs. 1 lakh its for long duration. The interest is good, I can withdraw the money through online banking without any charges. I am very fine with them.
      Was this review helpful? 3
      , indore
      Reviewed on Apr 03, 2019
    • IndusInd Bank Fixed Deposit
      "Good interst for FD savings"
      0.5 4.0/5 "Great!"
      I opened fixed deposit account through online, the process was simple without any documentation. Currently the bank is providing the interest around 8% for the FD account. I done it before year it has tenure this year one year. I think this august my Fd amount gets matured.
      Was this review helpful? 3
      , bangalore
      Reviewed on Apr 03, 2019
    • Standard Chartered Bank Fixed Deposit
      "Good service"
      0.5 4.5/5 "Excellent!"
      Hold a fixed deposit Account with STANDARD CHRATED BANK . The best thing is their Customer Service .The response of banking service and banking staff is good here . The online banking is good and the services at the branch is also satisfactory.So far it has been good experience with STANDARD bank .
      Was this review helpful? 1
      , new delhi
      Reviewed on Apr 03, 2019
    • HDFC Bank Fixed Deposit
      "Its Good"
      0.5 4.0/5 "Great!"
      I went to the bank for the FD process, the service was good they helped to open the account on the same day. I took the fixed deposit for the period of three years and I deposited Rs. 1 lakh, I would get the amount of Rs. 1.35 lakh. I do have HDFC online access .
      Was this review helpful? 3
      , hyderabad
      Reviewed on Apr 03, 2019
    • Post Office Fixed Deposit
      "Good Experience"
      0.5 4.0/5 "Great!"
      My fixed deposit got matured with Post office, the interest was nominal. The staff are good they gave me good service. There was no online option hence I need to visit for depositing the cash. I invested for five years for fixed deposit, my experience was good.
      Was this review helpful? 1
      , chennai
      Reviewed on Apr 03, 2019
    • HDFC Bank Fixed Deposit
      "Good overall"
      0.5 5.0/5 "Blown Away!"
      I have a fixed deposit account with HDFC Bank and the banking process is good. I could open this account online and the account has been beneficial too. I earn a good interest. I can also close this account without having to go in person to the bank. It can be done online too.
      Was this review helpful? 2
      , bangalore
      Reviewed on Mar 29, 2019
    • IndusInd Bank Fixed Deposit
      "Good Investment with Indusind bank"
      0.5 5.0/5 "Blown Away!"
      One time investment I have done in Indusind bank as a fixed deposit, it has locking period around one year. They are providing the interest around 8% for one year. Online option is easy to activate the service and closing, there is no charges for the FD maintenance.
      Was this review helpful? 2
      , indore
      Reviewed on Mar 26, 2019
    • Axis Bank Fixed Deposit
      "Convenient"
      0.5 4.5/5 "Excellent!"
      I have a Fixed Deposit with Axis Bank because they have offered more interest than ICICI BANK and its been more than 1.5 years. Their customer service is always good. The interest rate is around 7.6% which am not sure. I can manage the account online. I opted for 18 months.
      Was this review helpful? 2
      , hyderabad
      Reviewed on Mar 26, 2019
    • Bank of Baroda Fixed Deposit
      "Need improvement on customer support"
      0.5 4.0/5 "Great!"
      I have done one time investment fixed investment in Bank of Baroda, it has five year of locking period. The interest is nominal for the FD, I believe BOB give the interest around 8% , however there was no proper information regarding the interest. My father have taken this FD on my name, every year I deposit the amount.
      Was this review helpful? 1
      , noida
      Reviewed on Mar 25, 2019
    • Citibank Fixed Deposit
      "Its Good"
      0.5 3.0/5 "Satisfactory"
      I have converted saving maintenance into FD account for the term of one year. I can prolong period based on my convenience, the rate of interest is average for the fixed deposit. However I have online option to open and close the fixed deposit account at any time.
      Was this review helpful? 3
      , bangalore
      Reviewed on Mar 11, 2019
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