PPF vs ELSS
Compare PPF and ELSS (Tax Saving Mutual Funds) to find out the best suitable option for you.
|PPF (Public Provident Fund)||ELSS (Equity Linked Savings Scheme)|
|PPF is very safe, backed by Goverment of India.||ELSS are diversified equity funds (e.g Franklin India Tax Shield). So, it's volatile and risky by nature.|
|Return is also fixed @ 8.0% (Annual)||You can expect 12% or higher returns (Annual)|
|Tax exemption : EEE||Tax exemption : EEE|
|Lock in period : 15 years
(Although, partial withdrawls can be made after 5th year)
|Lock in period : 3 years.|
|Maximum duration : 15 years||There is no such limit.|
|One can deposit (upto 1.5L) a year in 1 to 12 installments||No such limits, however, the section 80C limit(1.5 L) will be applicable for claiming deductions|
|Better suited for risk averse investor who wants an assured return of 8%.||Better suited for young investor who can take risk and aim for a higher return (12% or more).|
Note : If you go for ELSS, buy direct plan of the selected fund instead of the regular one. It generates higher returns due to lower expense ratio.