• 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

    • SBI Fixed Deposit
      "Good in FD service"
      0.5 5.0/5 "Blown Away!"
      I am having a savings account with State Bank of India hence i have selected the Fixed deposit investment scheme with them. They are providing the interest rate of 8%. I have invested the money 2 years back and there is a lockin period of 72 months.
      Was this review helpful? 32
      , visakhapatnam
      Reviewed on Mar 02, 2020
    • Kotak
      Kotak Fixed Deposit
      "Safe and secure"
      0.5 4.0/5 "Great!"
      Kotak Mahindra bank is a reliable bank and good management thats the reason i have invested the fixed deposit scheme in this bank. They have provided me a interest rate of 7% and i have kept for the period of 1 year and 1 month. Overall, I'm satisfied with their services.
      Was this review helpful? 6
      , ahmedabad
      Reviewed on Mar 01, 2020
    • HDFC Bank Fixed Deposit
      "Safe and Secure"
      0.5 5.0/5 "Blown Away!"
      I have purchased HDFC Fixed deposit which I am renewing for every 13 months. They have given me an interest rate of 7% and There is no processing fee and there is no locking period as well. If I'm withdrawing FD amount before locking period, they are charging some amount.
      Was this review helpful? 16
      , ahmedabad
      Reviewed on Mar 01, 2020
    • Punjab National Bank Fixed Deposit
      "PNB Fixed Scheme is good"
      0.5 5.0/5 "Blown Away!"
      I went to the nearby branch for the Punjab National Bank for taking my fixed deposit as per my family members recommendation. I have invested the money of Rs. 50000 there was a lockin duration of 6 years when i withdraw the money, i got the money of Rs.1 lakhs. They have offered me a interest rate of 7%.
      Was this review helpful? 12
      , jamshedpur
      Reviewed on Feb 27, 2020
    • Post Office Fixed Deposit
      "Good Service"
      0.5 5.0/5 "Blown Away!"
      I was having my savings account from Post office hence i have invested my money into Post office Fixed deposit scheme. I have invested the money of Rs. 25000. There is a lockin period of 10 years. I have invested the money in the year of 2011. Post office service is proper. Overall, I'm happy about the services.
      Was this review helpful? 39
      , chennai
      Reviewed on Feb 25, 2020
    • HDFC Bank Fixed Deposit
      "FD is not good with HDFC"
      0.5 4.0/5 "Great!"
      I have invested some money as a Fixed deposit in HDFC Bank and the interest rate is not that much great because they are giving interest as compared to others. I have invested the money of Rs. 3L and there is a locking period of 5 years. Its 7% interest rate. If they are increasing the interest rate, it would be fine. Since I do all my transactions with this bank, I have selected same for my FD as well.
      Was this review helpful? 15
      , bangalore
      Reviewed on Jan 31, 2020
    • SBI Fixed Deposit
      "Good support"
      0.5 5.0/5 "Blown Away!"
      I have chosen my fixed deposit scheme from State bank of India because I'm maintaining my salary account with them and they provided rate of interest is fine for me. I have invested the money of Rs. 2.75 lakhs. There is a locking period of 45 days. They are giving interest rate of 4.5%. Overall, I'm satisfied with their services.
      Was this review helpful? 24
      , namakkal
      Reviewed on Jan 18, 2020
    • Kotak Fixed Deposit
      "Good App"
      0.5 5.0/5 "Blown Away!"
      I have been investing the money of Rs. 3 lakhs for the fixed deposit. I have selected Kotak mahindra bank for the FD because their net banking facility is very different when i compared to other. I can access everything regarding the account hence its easy to handle the transactions. I'm not sure about the interest rates. 7 months before, i have invested the money.
      Was this review helpful? 11
      , bangalore
      Reviewed on Jan 08, 2020
    • Kotak Fixed Deposit
      "Excellent Services"
      0.5 5.0/5 "Blown Away!"
      Its because of the competitive interest rates, i have selected the Fixed deposit in Kotak Mahindra bank. I have invested the fixed deposit 1.5 years ago and there is a lockin period of 5 years. They have invested the amount of Rs. 7.5 % and the employees are helpful in the branch.
      Was this review helpful? 8
      , mumbai
      Reviewed on Jan 08, 2020
    • Axis Bank Fixed Deposit
      "Good Savings scheme"
      0.5 4.0/5 "Great!"
      I have a Fixed deposit in Axis bank. I have invested the money of Rs. 10000 for two FDs. There is a lockin duration of 1 year. They are giving a interest rate of 7%. Through net banking, i have activated this Fixed deposit. There is no tax benefits available. Axis bank service has been good. Overall, I'm happy about their services.
      Was this review helpful? 9
      , kolkata
      Reviewed on Dec 31, 2019
    • Oriental Bank of Commerce Fixed Deposit
      "Good Scheme"
      0.5 5.0/5 "Blown Away!"
      Since last 15 years, i have a account with Oriental bank of commerce thats the reason i have invested the money in fixed deposit with the same bank. I have invested the amount of Rs. 11 lakhs. They are giving the interest rate of 6.5%. There is no locking period but i have chosen the duration of 1.5 years. There is no additional charges deducted for this fixed deposit.
      Was this review helpful? 17
      , bulandshahr
      Reviewed on Dec 03, 2019
    • Post Office Fixed Deposit
      "Good Service"
      0.5 4.0/5 "Great!"
      Interest rate is very low in Indian post office Fixed deposit scheme because they are providing only 8.5%. I have chosen this office because of the child benefits. I have invested the money of Rs. 1.5 years. Its 3 years lock in period. Overall, I'm satisfied with the service provided by post office employees.
      Was this review helpful? 61
      , parvathipuram
      Reviewed on Dec 03, 2019
    • SBI Fixed Deposit
      "Good bank for Fixed Deposit"
      0.5 4.0/5 "Great!"
      I have invested the money in SBI for a fixed deposit and based on my wife recommendation i have chosen it. They are providing the interest rate of 7.25%. They have option to select the lock in period in that i have chosen 5 years. We had visited their branch and the response was good.
      Was this review helpful? 34
      , mumbai
      Reviewed on Nov 12, 2019
    • HDFC Bank Fixed Deposit
      "Good one"
      0.5 4.0/5 "Great!"
      Its easy accessible and to redeem so that i have invested the money in Fixed Deposit with HDFC BANK. I have invested the money of Rs. 2.5 lakhs and they have provided me a interest rate of 7.5%. There is no locking period. I didn't got any additional charges till now.
      Was this review helpful? 20
      , hyderabad
      Reviewed on Nov 12, 2019
    • Post Office Fixed Deposit
      "Safety deposit"
      0.5 5.0/5 "Blown Away!"
      I have paid the money of Rs. 4.5 lakhs as a fixed deposit in the Indian post office. For the safety purpose, i have chosen the post office account. They are offering me a interest rate of 7.9%. There is a lockin period of 5 years. If i withdraw the money in 1 year, they will reduce the interest rate of 2% and after 3 years, its 1%.
      Was this review helpful? 112
      , jaipur
      Reviewed on Nov 08, 2019
    • Central Bank of India Fixed Deposit
      "Good Bank"
      0.5 4.0/5 "Great!"
      Interest rates are less in Central Bank of India so I had taken a fixed deposit. I have invested the money of Rs. 1 lakh in my wife's name. Branch is near from my place so I have chosen this bank. Yearly once, I get the money of Rs. 6,765 for the interest. There is a locking period of 1 year.
      Was this review helpful? 14
      , tirupur
      Reviewed on Nov 06, 2019
    • ICICI Bank Fixed Deposit
      "Customer centrice & User friendly app"
      0.5 4.0/5 "Great!"
      I am doing Fixed Deposit with ICICI BANK and its been around 5years. They haven't been paying good interest and its more or less same like other banks as I used to hold my salary account with ICICI, I have decided to be with one bank. There is no locking period and its flexible. They do give good support and the app is user friendly. Even deposit account can be opened through i-mobile or net banking itself.
      Was this review helpful? 20
      , nasik
      Reviewed on Oct 15, 2019
    • SBI Fixed Deposit
      "Good"
      0.5 3.0/5 "Satisfactory"
      I had a Fixed Deposit in State Bank of India, I have completed the tenure before 3months ago. I have no issues with the customer service. They are given me 7% interest rate for 2years. There is no profit and processing fee. I got an online access, where I can check the interest rate anytime on the YONO app or else SBI online.
      Was this review helpful? 31
      , tirupati
      Reviewed on Oct 15, 2019
    • SBI Fixed Deposit
      "Interest charges are good. "
      0.5 3.0/5 "Satisfactory"
      I have invested some money through FD. My salary account is in SBI so i have a zero ATM charges and the limit is not actually set by SBI. They do have short term FDs which is pretty good. I have invested the money of Rs. 60000 and the interest rate is 10.01% for the tenure period of 16 months. There is no lockin period. There is no hassle to getting the money back.
      Was this review helpful? 44
      , kolkata
      Reviewed on Oct 01, 2019
    • Dena Bank Fixed Deposit
      "Good plan for senior citizen"
      0.5 2.0/5 "Expected more"
      I have invested the money in Dena bank through Fixed deposit and the growth is not that much good. They are not taking any hidden charges. Only because of the Government undertaken bank, i have selected them. They are providing a interest rate of 6% per annum. I have invested the money of Rs. 2 lakhs. There is a lockin period of 1 year.
      Was this review helpful? 17
      , new delhi
      Reviewed on Sep 24, 2019
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