Dhirendra Kumar explains if one should invest in PPF
23-Mar-2022
How is PPF an investment to save tax? Is it the best?
- Suman pal
My advice to PPF investors or depositors is to keep it if you have it. If you don't have it, don't do it. I'll give you the reason for it. PPF is a 15-year SIP into fixed income yielding investment. So when you are investing for 15 years, the worst of tax-saving funds would have gotten you more return than PPF.
So that's point number one. But at the same time, if you already have PPF, the interest income from PPF is tax-free, so you should think of PPF as your fixed income allocation. It is the finest fixed income alternative if you have already accumulated it because it's a very popular investment. Most people have a PPF account, even if they don't have a mutual fund or market-linked investment. In fact, very recently, the number of investors who had a PPF account was more than the total number of equity investors in the country.
So, this is one rock-solid, government-backed, safest investment avenue. It gets you interest income which generates an entirely tax-free profit. So, if you have it, you should hold it, and if you don't have PPF, invest in a tax-saving fund, it'll make you rich.
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