Savings are an important aspect of our lives whether it is to plan for your retirement or build an emergency corpus. There are plenty of good options to invest smartly and further grow your savings. Fixed deposit (FD) and Public Provident Fund (PPF) are popular investment tools. Individuals can open an FD or PPF account with a post office or a bank.
Public Provident Fund (PPF) latest interest rates
Public Provident Fund (PPF)is one of India’s most well-liked investment options. The popularity of PPF can be attributed to various factors. This is the only debt instrument with an exempt-exempt-exempt (EEE) status.
PPF interest rate for the July-September quarter of FY 2023-24 has been kept unchanged at 7.1 per cent. PPF interest rates have remained unchanged since April 2020
Notably, the interest rates on small savings schemes are reviewed every quarter by the government.
Post Office FD latest interest rates
The post office time deposit or fixed deposit is similar to bank FDs. It provides a guaranteed return to the depositor who deposits an amount for a fixed period of time.
With the revision, a one-year term deposit with post offices will now earn 0.1 percentage higher point at 6.9 percent, and for the two years tenor — 7 per cent (up from 6.9 per cent). However, interest rates on term deposits for three years and five years have been retained at 7 per cent and 7.5 per cent.
Post Office Time Deposit (1 year)- 6.9%
Post Office Time Deposit (2 years)- 7%
Post Office Time Deposit (3 years)-7%
Post Office Time Deposit (5 years)-7.5%
The depositors can also claim income tax exemptions worth Rs. 1.5 lakh under Section 80C of the Income Tax Act, 1961. However, these exemptions are available only for the lock-in period of five years.
The government on Friday raised interest rates on select saving schemes by up to 0.3 per cent for the July-September quarter.
PPF vs Post Office FD: Which is suitable for whom?
Both FD and PPF are good options for investors. PPF is preferred by people who are looking to invest from a long-term point of view. The security it provides is unmatched due to the government’s backing. However, it comes with an extremely long lock-in period of 15 years.
FDs are comparatively more liquid and give you the flexibility of deciding the tenure. The tax-saving FDs have a lock-in of 5 years. But FDs go carry some risk and also the interest you earn is taxable.
Updated: 03 Jul 2023, 02:18 PM IST