SIP, PPF and Fixed Deposit: Which is the Better Option?


There are many investment options available in the market to be able to get higher returns. You should choose one that best suits your requirements and financial goals. Systematic Investment Plans, Public Provident Fund, and Fixed Deposits are among the top investment options that people go for.

Here are a few features and benefits of each of the three investment options:

Systematic Investment Plan

Systematic Investment Plan, known as SIP, is a procedure which enables investors to put resources into mutual funds. Under a SIP, investors make standard investments of a pre-chosen sum, generally less, into mutual funds all the time (quarterly, month to month) rather than making a high esteem interest in one go. Henceforth, SIPs are advantageous and adaptable plans which help teach the propensity for sparing as well as take into consideration trained sparing which procures long term gains. SIP’s may be assessable relying upon the principles administering tax collection on common reserve ventures. For example, a SIP in ELSS for example Value Linked Saving Scheme will be qualified for assessment conclusion under the arrangements of Section 80C. In any case, long haul capital increases earned on shared store value plans will be tax exempt. The best benefit of SIP is that there is no lock-in period because of which investors can withdraw their investments at any time.

Public Provident Fund

Public Provident Fund, otherwise called PPF, is a long term investment which was presented by the Government of India under the Public Provident Fund Act, 1968. PPF has been a prevalent selection of investors as it is a generally progressively traditional type of investment which loans equalization to one’s portfolio. Sponsored by the administration, it is a moderately protected speculation which additionally yields fixed however appealing returns which are tax exempt. A PPF record can be opened for a base term of 15 years and with a base introductory store of Rs 500. The greatest store which can be made into the record is fixed at Rs 1,50,000 which can be made either as a singular amount or in 12 portions on a yearly premise. When the tenure of the PPF is finished, financial specialists have the alternative of pulling back their profits of re-contributing the equivalent for extra time of 5 years. Interest on PPF is determined yearly and credited to the record toward the end of every year. Interest calculation is done every month based on the most minimal record balance between the fifth and last date of the month. Profits offered for PPF speculations are fixed and the equivalent is resolved at the season of record opening. The rate of interest is liable to change amid the investment time frame contingent upon any adjustment in the administration strategy overseeing PF accounts. Under Section 80C all returns including interest are tax-free. 15 years of minimum tenure has been fixed for the investment. One can either withdraw the money or choose to continue to renew investment for 5 years on every renewal. Its lock-in period is for 15 years which is also the term of the investment.

Fixed Deposit

Fixed Deposits (FDs) is a definite addition in any ideal investment portfolio. Typically, with regards to placing assets into an FD, a large number of individuals are confused about what investment to pick. FDs come in various periods including present minute, medium-term and long term. Long term FD are normally held for the time between 5 years to 10 years. The investment is offered on a wide scope of deposits (short, medium and long) from 7 days to 10 years. A couple of banks may offer a higher financing cost for a progressively drawn-out endeavour term yet this contrasts from bank to bank. The best length for long term FD’s are 10 years yet a couple of banks may in like manner offer a higher range in India. Bajaj Finance goes under the most elevated interest rate of 9.10 percent.

Fixed Deposit is a better option as it provides interest rates higher than the other banks and nonfinancial banking corporation. It also provides easy renewal and withdrawal during emergencies and other requirements.

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