PPF vs ELSS

This tool PPF versus ELSS helps investors compare the returns of PPF (Public Provident Fund) with any of the ELSS (Equity Linked Savings Scheme) Mutual Fund Schemes. At a time, you can compare 5 ELSS mutual fund schemes with PFF and see the results both in tables as well as on a chart. Investors should be aware that PPF is an assured return scheme. The interest rates of PPF is declared every quarter. However, the returns of ELSS Mutual Funds are not assured as these are market linked. If you use the PPF versus ELSS research tool you will find that long term returns of ELSS Mutual Fund Schemes are superior compared to the PPF. Generally, investors invest in PPF and ELSS Mutual Funds to avail Income Tax benefit Under Section 80C of The Income Tax Act 1961. The maximum limit of investment under Section 80C is Rs 150,000 in a financial year. Most Section 80C eligible investments have a minimum lock-in period. Therefore, when you are making a tax saving investment, you should have a long term investment horizon. The investment tenure of PPF is 15 years but ELSS mutual funds have a lock-in period of only 3 years. Please also note that if you are investing in ELSS mutual funds through SIP, each instalment is locked in for 3 years. Purely from a liquidity perspective, ELSS mutual funds is one of the most liquid 80C investment options. This is not to suggest that, you should redeem ELSS investment after 3 years, because the longer you stay invested, the more you stand to gain through the power of compounding. The liquidity of ELSS compared to other 80C investment options is just an added advantage over and above the expected higher returns in the long run. To know more about PPF versus ELSS, please refer to this article Did you know ELSS Mutual funds are better option than PPF . The returns shown are in XIRR Percentage.