While stepping into the investment sector, you will come across many investment options available in the market. Some of the prominent investment tool
While stepping into the investment sector, you will come across many investment options available in the market. Some of the prominent investment tools are Fixed Deposit (FD), Employee Provident Fund (EPF) or Provident Fund (PF), Public Provident Fund (PPF), Debt Mutual Funds, etc. The investment tools are categorized based on the risks associated with that investment.
The Public Provident Fund Act of 1968 issued the Public Provident Fund scheme under the governance of the Government of India. It is a long-term savings scheme that is one of the most prominent investment tools in India. PPF is a secure mode of investment that offers decent investment returns. You can also avail tax deductions under the Indian Income Tax Act (Section 80C).
Should You Withdraw from PPF and Invest in Fixed Deposit?
To answer this question, firstly you got to know the basic differences between a PPF and an FD. Following are a few features of the two prominent investment tools:
| Features | PPF | FD |
| Maturity Period | 15 years | 7 days to 10 years |
| Interest Rates | Fixed and altered by Government (at present it is 8.7%) | Fixed and altered by individual banks or Non-Banking Financial Companies (NBFCs) (at present it ranges from 8.75% to 9.10%) |
| Premature Withdrawal | Available after 5th policy year | Available with penalty charges applied |
| Loans | Available from 3rd policy year | Available with 90% fund utility permission |
| Investment Limit | Rs 1,50,000 per annum | No limits |
| Tax Deduction | Available up to Rs 1,50,000 per annum | Available up to Rs 1,50,000 per annum |
Both the investment options are secure and so withdrawing money from PPF and depositing in FD is wholly based on your financial requirements. If you wish for higher returns from your investment, you can invest all your money in an FD. Also, you can invest a portion of your savings in a Provident Fund (PF) account and a portion in the FD account.
However, if you choose to invest in an FD, you must consider investing with reliable financial providers like Bajaj Finance with an FAAA accreditation from CRISIL and MAAA accreditation from ICRA. Following are a few benefits of investing in an FD with Bajaj Finance:
- Guaranteed and stable returns on investments
- No influence of market rate fluctuations
- High FD interest rates varying from 8.75 % to 9.10%
- Facility to deposit a sum as low as Rs 25000
- Flexible tenor differing from 12 months to 60 months
- 0.35% hike for Senior Citizen Fixed Deposit Interest Rates
- Calculate FD interest rates and maturity returns with the online FD calculator
- Quick online application procedure with minimal documentation
- Select the type of FD from cumulative and non-cumulative
- Choose the frequency of the interest rate payout from a monthly, quarterly, half-yearly, and yearly basis
- 24/7 customer care support online as well as offline for guidance regarding any financial services offered by the company
- Avail loan against FD wherein you can use up to 90% of the accrued sum
- In case of emergencies, make a premature withdrawal by paying a penalty charge for the same
Apart from the benefits mentioned above of investing in an FD with Bajaj Finance, you also have the facility to open a senior citizen FD if you are 60 years old or above. Based on the customer category you belong to from new customer, existing customer, and senior citizen, the interest rates vary. The FD interest rates for existing customers will be higher than that of new customers.
Similarly, the Senior Citizen Fixed Deposit Interest Rates will be higher than that of the customers below the age of 60 years. Moreover, you can open multiple FD accounts unlike a PPF account and ladder your investments to maintain liquidity as well as eliminate the risks of premature withdrawals.
