ELSS vs PPF – What should you invest in and why ✨

We’re here to help draw a comparison between ELSS Mutual Funds and People’s Provident Fund based on what your end goal is.

With both ELSS and PPF, you can get a maximum deduction of INR 1.5 Lakh under Section 80C of the Income Tax Act, 1961. Both these instruments help save taxes but differ on many other important parameters. ELSS investment relies on equity and has higher volatility compared to PPF which is a debt instrument with negligible volatility.

ELSS Funds generate returns by primarily investing in equity and equity-related instruments. This makes it a suitable investment option for a person with long term goals. PPF is a Government of India backed debt asset, suitable for long terms financial goals such as children’s education and retirement planning.

By investing in ELSS you get a combination of the highest gain of 12% and above, as well as the lowest lock-in period of 3 years! PPF carries a longer lock-in period of 15 years.

ELSS Funds invest in equity and equity-related instruments and are exposed to market risks, which makes them a better investment option for those who are willing to risk volatility for the sake of long term gains. A PPF investment is low risk because it is backed by the Government. It’s a better investment option for highly risk-averse investors.

The returns on ELSS depend on market movements. The 3-year annualized historical returns on ELSS funds are 12% and above. The rate of interest on PPF investment is decided by the Government of India with the present rate being 7.9%.

Take a call on your investment plan and don’t forget to tell us what you prefer in the poll below!

  • ELSS Funds
  • Public Provident Fund (PPF)

0 voters