Fixed deposit
- It is a financial instrument provided by bank to the investor
- It tends to provide higher interest rate than a normal saving account till the maturity period arrives.
- In fixed deposit scheme, money cannot be withdrawn before maturity.
- The interest rate varies from 4 to 11 %
- The tenure of an FD can vary from 10 days to 10 years.
- Usually in India the interest on FDs is paid every three months from the date of the deposit.
- Fixed Deposits does not have any minimum and maximum limit of investment.
- In India fixed deposit interest rate varies from bank to bank.
- Interest on fixed deposit is a taxable income.
- Taxable income Rebate on Fixed Deposits amounts cannot be availed in the financial year of investment
Public Provident Fund
- Public Provident Fund (PPF) is tax-saving instrument in India
- The interest rate provide on PPF is generally 8% which is changed by government time to time.
- PPF has maturity period of 15 years
- Pre-mature withdrawals can be made from the end of the sixth financial year from when the PPF commenced.
- PPF has minimum investment limit of Rs 500 per year and maximum of Rs 60,000 per year.
- Interest on Public Provident Fund is tax free.
- The interest on PPF is calculated from 5th day of month to last day of the month
- Rebate from taxable income can be availed in the financial year of investment.
- PPF is beneficial for the investor who are looking for long term investment.
- Loan facility is available against both fixed deposit and Public provident fund schemes.
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