ELSS vs PPF vs FD: Which is better for investment and where will you get higher returns? Understand everything

News Topical, Digital Desk : ELSS vs PPF vs FD: Nowadays, people have a variety of investment options. But many remain confused about where to invest. Investors often face a dilemma when deciding between one investment option and another. If you're confused about investing in ELSS (Equity Linked Savings Scheme), PPF (Public Provident Fund), and FD (Fixed Deposit), we'll help clear that confusion up for you. 

ELSS vs PPF vs FD: Which is better for you?

ELSS: For those who don't know, Equity Linked Savings Schemes, or ELSS, are mutual funds that offer deductions of up to ₹1.5 lakh per year under Section 80C (under the old tax system). These mutual funds invest in equities and have a lock-in period of three years.

As per SEBI's classification of mutual fund schemes, ELSS mutual funds are required to invest at least 80 per cent of their assets in stocks as per Equity Linked Savings Scheme, 2005.

PPF: The Public Provident Fund is a government savings scheme that offers guaranteed returns. PPF currently offers an annual interest rate of 7.1 percent.

Like ELSS, investments in PPF are eligible for a deduction of up to ₹1.50 lakh per year under Section 80C of the Income Tax Act (old tax system). PPF has a lock-in period of 15 years.

Fixed Deposits: FDs are a form of investment scheme offered by banks that offer a slightly lower interest rate (around 6-6.5 percent annually). These deposits are tax-free, and the interest earned is taxable. You can choose a lock-in period of your choice.

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