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PPF Or Mutual Funds: Where Should You Invest?

Adhil Shetty


Q. PPF vs Mutual Funds: Where Should I Park My Money? Astha Pandey

A. Both the investment products come with their own pros and cons. Your choice depends on your age, risk appetite, return expectations, liquidity needs and financial goals.

PPF is one of the best investment products available in the market if you are looking for a low risk, low return and tax efficient investment product for a very long-term. However, it has a lock-in period of 15 years due to which liquidity might be an issue. It also offers tax benefit under Section 80(C).

On the other hand, if you are looking for investment flexibility, diversification benefits and the option to invest as per multiple financial short and long term objectives, then mutual fund could be the best choice for you. You can invest in debt funds, equity funds, gold, etc. and work towards your financial goals with calculated risk. If you invest in an ELSS fund, you also get tax benefits. The lock-in period under ELSS fund is only 3 years.

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