PPF Return Beats Bank FDs' Over Long Term

PPF is among the safest investments.

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KSHITIJ PATEL, email

I've been investing in equity-linked savings scheme (ELSS) and Public Provident Fund (PPF) for over a decade. With the new tax regime now seeming more beneficial, should I continue these or explore different options?

With a government-backed fixed interest rate of 7.1 per cent, subject to change every quarter, its tax-free returns are equivalent to a 10.15 per cent return on bank fixed deposits (FDs) after tax, and is ideal for investors seeking capital protection and steady long-term growth. The 15-year lock-in strengthens its appeal for those focused on stable wealth accumulation in the long term.

For ELSS, focus on performance, since the new tax regime offers no deductions. Continue holding it till the three-year lock-in. After that, treat it like any equity mutual fund.