Finance and Investing

Is ppf worth it?

2 answer(s)
Answer # 1 #

Public Provident Fund (PPF) is absolutely worth it for most Indians, especially if you're looking for a safe, long-term savings option! Here's why:

  • Tax benefits: EEE category - tax-free deposits, interest, and withdrawals
  • Government-backed: Zero risk to your principal amount
  • Decent returns: Better than most fixed deposits after accounting for taxes
  • Forced savings: 15-year lock-in encourages long-term wealth building

The current interest rate is around 7.1% (as of 2024), which might not seem exciting, but the tax advantages make the effective return much higher. It's perfect for retirement planning or your child's education fund. Just remember it's a long-term commitment!

[8 Day]
(0)
Answer # 2 #

As a financial planner, I often recommend PPF to clients, but with caveats. It's worth it if:

  • You're in the 20% or 30% tax bracket
  • You want capital protection above high returns
  • You have a 15+ year time horizon
  • You've already exhausted other options like EPF and NPS

However, for young investors with higher risk tolerance, equity investments through SIPs might generate better inflation-adjusted returns over the long run. PPF is fantastic for the debt portion of your portfolio. The inflexibility of the 15-year lock-in can be both a pro (disciplined saving) and con (limited access to funds).

[7 Day]
(0)

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