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Public Provident Fund vs Fixed Deposit.Which is better?


The Public Provident Fund (PPF) and Fixed Deposit (FD) are the two safest and popular forms of savings. Although ,these both are investment schemes,they have different features.
Here is a detailed comparison between them.

What is PPF account ?

Money gets locked for a period of 15 years in PPF account with the option of extension in the block of 5 years.

What is FD?

It is a kind of secure invest scheme which provides you higher rate of interest than a regular savings account and offers guaranteed returns.

What are the different interest rates provided by banks in PPF and FDs?

A interest rate of 7.1% is provided in PPFs and a fixed interest rate of 8-9% is provided by banks in FDs.The interest rate of FDs does not change even in the time of crisis.

What is the tenure difference between both?

Fixed tenure of PPF is 15 years with an option of extension in the blocks of 5 years.
The tenure offered in FD ranges from 1 to 5 years. So,here in FD ,you can get the flexibility to choose the tenure which you can’t get in PPF.

What are the different minimum and maximum amount which are deposited in PPF and FDs?

The minimum annual amount that can be deposited is INR 500 and it goes upto 1,50,000 per year.
There is no fixed limit with FDs.

Can you avail loans from any of these?

You can avail loan from PPFs only after the completion of 3 years.
The loan against FD is provided at any point of time.

What are the premature withdrawal rules?

If you invest in PPF ,you can withdraw the amount after the completion of 5th years but only a certain amount.
You can withdraw your FD at any premature time .

What are the terms of investment?

PPF investment made in lumpsum or in installments with a maximum limit of 1.5 lakhs.
Fixed deposits require one to make a one time investment.

Both of these investments are secure and have their own benefits . However,choosing between PPF and FD is a personal choice and should be based on one’s financial needs.

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