One Reply to “Is PPF [public provident fund] the best investment option in the current scenario.?”

  1. Hello Rajiv,

    To save your money through the Public Provident Fund route is amongst the best in its category. As you would be contributing to your PPF account on a monthly basis at a reasonable savings rate (that is percentage of your overall income per month).

    There are many benefits of a PPF account. To name a few:

    1. You save on tax.
    2. The money in your PPF account would be compounding at the interest rate specified by the government. (Which would mean that even the interest earned would be added to your corpus in subsequent years to increase the interest income earned).
    3. When you do withdraw your PPF amount there would be no tax payable by you on the money you receive at the end of the tenure of your PPF account. (It would be prudent to check with a CA or tax advisor in this regard).
    4. You are allowed to make partical withdrawals from your PPF account on certain specified occasions.
    5. There is no market risk associated with PPF, as all their investments are routed through the government. (Here again it would be prudent to check with the CA or tax advisor; whether the PPF funds would be invested in riskier financial insturments in the future).

    It would not be fair to confuse your PPF account with investments in other financial insturments; like investing in the stock market through the purchase of stocks of your choice. As in the stock market you would be exposed to all the five risks associated with it.

    To save your income in your PPF account would be the best; as it is not depended on the current scenario in the stock market or any other market for that matter.

    Happy saving.

    Sincerely,

    Akash
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