PPF or FD

POSTED BY M.H.Raashid ON March 18, 2011 10:47 pm COMMENTS (7)

I want to give security of Finance to my child so please advice The best way of investment for long term of 15 years PPF or FD?

7 replies on this article “PPF or FD”

  1. M.H.Raashid says:

    @Ramesh

    Then how secure are MF’s and wch area to start with I mean how much shud I invest as a beginner and in wch Fund’s shud i invest and for how long shud I invest. For example I have a balance Cash of 20k with me per Annum n 5% can B added every year n I need 8Lac after 15years were shud I invest so I can get those 8Lac for sure…Is MF’s make me that figure for sure as PPF or FD or any RISK involve in MF’s like they may reach that figure or they may not or atleast I get my investment back what exactly will b the seen after 15years….

    1. Raashid

      First thing is you have to understand interest in PPF at 8% and interest in FD at 10.5% are very much same . You have to ask what is real return after inflation and taxes , ti would be almost same in both PPF and FD .

      FD interest is taxable , PPF interest is not , so at the end both will be around 8% (approx) .

      MF can be great in long terms , You cant judge them on short term with FD .

      Manish

  2. M.H.Raashid says:

    Hi Manish

    I wanna some secure Financial Growth so i can get good returns in future, I came to know about PPF via ur Blog n found intresting but know a days FD is giving more interest rate 10.50%comparing PPF 8%. And Thanks to ur blog of Insurance Endowment Policy returns at maturity it was really Eye Opener I m having a Jeeven Anand of 9 months old was paying quarterly 8200/- know I asked my Agent to process for closing my policy and I got TERM Plan from ICICI iProtect for 30 LAC and a 18 months back I invested in 200grms GOLD BAR. I am little bit afraid of MF as I dont have any kind of knowledge as thats the reason I am looking for secure returns but I am going through ur Blog to learn bout MF’s so in future I may invest but right know I wanna give a Guarantee security of 20Lac CASH to my CHILD after 15 years so I m planning to invest in PPF or FD on my CHILD name.

    Thanks for Eye opener on Insurance Policy.

    1. Ramesh says:

      Good that you are educating yourselves.

      Any debt fund incl PPF and FD will give you “less” returns than inflation. period.
      This actually means the purchasing power of money in FD/PPF decreases over time (whatever be the nominal return).

      and MF are for people who do not actually know much about stock markets.

  3. Ramesh says:

    Certainly, neither of the two are “best” in any way.

  4. Raashid

    your goal is very vague , you need to define it in a bit detail .

  5. manickkam says:

    Hi Raashid,

    The best way for long term for 15 years to have it locked is certainly PPF over FD. FD returns are 10% for the first year but thats pre-tax returns and as its highly liquid, it will be used for other purposes by you very easily.
    I would suggest you to go for PPF, if you want long term investment and safety of your money.

    -Manickkam.
    http://manickkam.blogspot.com/

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