Why is FD a Better Investment Avenue than PPF?

When you are looking for a safe investment avenue, the two options which are likely to come to your mind are FD and PPF. Both are widely used as they are a non-risky investment option. They are not subject to market prices, and you get your assured capital and interest earned at the end of the maturity period. Both fixed deposits and Public Provident Fund is fixed income instruments, and therefore, it can get tricky to choose between the two.

The best way you can decide upon which one suits your financial needs the best is by comparing both the investment methods.

	PPF (Public Provident Fund)	FD (fixed deposits)
Interest rate	8% to 8.5%	8.75% to 9.10%
Tenure	15 years (can be extended in blocks of 5 years)	12 to 60 months
Liquidity	Low	High
Minimum deposit	Rs.500	Rs.25000
Maximum deposit amount	Rs.1.5 Lakh per year	Up to Rs.5 crore
Investment plan	Long-term	Long-term and short-term

You cannot make more than 12 deposits in a year in the case of PPF. Both the Public Provident Fund and fixed deposits have their own benefits, but FDs can earn higher returns. If you are planning on investing in FD; make sure to select the right financial institution that offers several features. Reputed NBFCs like Bajaj Finserv offer attractive features such as a high-interest rate, high safety ratings, and flexible tenure. Senior citizens get an additional interest rate of 0.35%. You can visit bajajfinserv.in to know more about their FD benefits and eligibility criteria.

Also, Read This: Here’s why a Bajaj Finance Fixed Deposit is better than other investment avenues