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Public Provident Fund Vs Fixed Deposit Scheme: Along with earning money, it is equally important to invest it in the right place. Generally, there are many investment options available in the market, but even today many people believe only on Government Scheme or Bank FD for investment. If you also want to invest in one of the Government’s Public Provident Fund Scheme or FD Scheme, then we are telling you which option is better for you.

It is worth noting that both the schemes are away from market risk. Due to rising inflation in the country, the Reserve Bank of India has continuously increased its interest rates in the last few months. After this, many banks are offering 8 to 9 percent interest rate to the customers in the long term. In such a situation, the question arises that which scheme is better to invest in FD or PPF. Let us know in which scheme you will get more return on investment-

Know about Public Provident Fund Scheme-

Public Provident Fund (PPF Scheme) is one of the small savings schemes run by the government. The government of this scheme fixes the interest rate every quarter. By investing in this scheme, you can get the benefit of Public Provident Fund even without a job. Under this scheme, you can invest for 15 years and invest a minimum of Rs 500 and a maximum of Rs 1.5 lakh. After completion of 15 years, you can extend the tenure of the scheme for another 5 years. Under this scheme, 7.1 percent interest is being received on the deposited amount. The interest earned on the deposited amount is completely tax free. Along with this, a deduction of Rs 1.5 lakh is available under Section 80C of Income Tax on the amount invested in the scheme.

FD Scheme-

To curb the rising inflation in the country, many private and public sector banks of the country have increased their FD interest rates (FD Scheme). State Bank of India, the country’s largest public sector bank, is offering interest rates ranging from 3.00 per cent to 6.50 per cent on FDs ranging from 7 days to 10 years and from 3.50 per cent to 7.50 per cent to senior citizens. At the same time, under the Amrit Kalash scheme, the bank is offering 7.10 percent and 7.60 percent interest rates. On the other hand, HDFC Bank is offering interest rates ranging from 3.00% to 7% to general citizens and 3.50% to 7.75% to senior citizens on FDs ranging from 7 days to 10 years.

PPF Vs FD Scheme-

Talking about the interest rate, the PPF scheme gives returns on the basis of compounding. On the other hand, in fixed deposit scheme, either of the two methods of normal or compounding interest rate can be offered. If you are planning to invest for a short period, then FD is a better option for you. On the other hand, PPF scheme can prove to be a good option for long term investment.

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