Case Study - PPF Vs. ELSS

Traditionally, investors use to invest in PPF - Public Provident Fund for the reason it had no risk, considered safe, tax free interest with steady savings and returns over long term.

But, there was a big catch, it is having huge lock in period of 15 years. Also the PPF interest rates in year 2000 were 11.00% and as on current, they are just 7.90%. Inflation is rising and interest rates are getting lower. 

So effectively there is no real appreciation in capital gains against the rising inflation and hence there is no benefit of investing in PPF anymore. 

Because, as of now it just serves the purpose of Tax benefit, but in future no body knows government may introduce tax on PPF interest.

So as an alternative long term investment plan, there exists another better investment product or scheme called ELSS - Equity Linked Saving Scheme, which can serve the above mentioned purpose.

This gives investors primarily the tax benefit, indexation benefit and higher returns better than PPF as it is linked to rising inflation and market growth. 

This is like Mutual Fund - SIP, year on year basis, where investors can invest up to 1.50 lacs per annum to enjoy tax benefit and lock in period is just 3 years.

Hope above investment product may help towards serving your investment purpose, any time you can approach me for advisory and support.

Parimal Shah

Business Partner - Financial Products

There are many schemes available for investment. If you are interested, please contact us right now. We will study, suggest safe and best scheme that will fit your requirements, give better returns and safeguard your investment.