CATEGORY | PPF (PUBLIC PROVIDENT FUND) | ELSS (EQUITY-LINKED SAVINGS SCHEME) |
Risk | Backed by the Government of India, has Sovereign Guarantee, PPF investments are safe | ELSS is an equity mutual fund which are subject to market risks, the risk can be reduced with longer holding period. |
Returns | The interest rate of return is declared by the government of India every year. Currently it is 7.1% p.a. Generally, between 7% and 8% p.a. | ELSS is a market-linked instrument. The returns depend on the scheme selected and vary between 12%-14% approximately |
Performance | With current interest rate of 7.1% if Rs 150000 invested every year for 15 years, the corpus at the end of 15th year would be Rs 4060000 | With an average return of 12% if 150000 invested every year for 15 years, the corpus at the end of 15th year would be Rs 6263000 |
Tax Benefits? | EEE (Exempt Exempt Exempt) PPF is exempt from taxes at the time of investment, accumulation, and withdrawal | Entitled for 80C deduction up to 1.5 lakh, ELSS is subject to 10% LTCG tax if the gains are over and above Rs. 1 lakh after a period of 1 year |
Lock-in Period | 15 years. (Post the 5th year partial withdrawals are permitted) | ELSS investments have a lock-in period of 3 years. There is no possibility of premature withdrawal |
Investment Duration | You can invest for an initial term of 15 years. After that account can be extended for a block of 5 years. There is no limit on number of extensions | ELSS investments have no upper time limits |
Investment Amount | You can invest between Rs. 500 and Rs. 1,50,000 in a financial year in a lump sum or in 12 instalments | No such limit on maximum amount. You can invest in lumpsum as well as through monthly SIP. |
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