Public Provident Fund Vs Equity Linked Saving Scheme | ELSS vs PPF Interest Rates

Are you confused to select the best saving scheme between PPF and ELSS? Don’t worry, read this complete article and invest your savings in the best scheme. You can also know about the PPF vs ELSS from the below sections of this page. PPF is abbreviated as Public Provident Fund whereas ELSS is abbreviated as Equity Linked Saving Scheme. We all know about the PPF, but ELSS is not much familiar. So, we have mentioned the complete info regarding the Equity Linked Saving scheme along with the PPF. Therefore, it is easy for you to choose the best scheme.


As the PPF, ELSS are the long-term saving schemes; you have to know about these schemes in detail. Every individual who wants to save their money in PPF and ELSS schemes must have a clear view of all the details such as Lock in Period, investment limits i.e, maximum and minimum, maturity period, installment payments, interest rates, benefits of PPF vs ELSS, deposit amounts etc. Hence, we have provided the complete information so that you can compare PPF and ELSS easily.

What is Public Provident Fund?

The PPF is a long term investment scheme with attractive interest rates. PPF returns tax-free. Duration of the scheme is 15 years with a maximum investment limit of 1,50,000. The installment basis is also available in this PPF scheme. For this PPF account, the interest rates are announced by the government of India. As per the Indian Government, Ministry of Finance, the interest rate of the Public Provident Fund is 8.1%. This scheme is linked with the government security bond for 10 years. So, it is extremely safe.

The interest rates in the PPF saving scheme are fixed every year. The PPF deposit modes are online transfer, via cheque, debit card. It may be one time deposit or the 12 months installment. A joint account is not possible for this public provident fund. PPF loan facility is available only between 3-6 years of the tenure. PPF Form A is used to open the Public provident fund account in any bank. The PPF account facility is available in many nationalized banks.

Public Provident Fund Benefits

  • PPF Account opening process is simple.
  • No particular eligibility rules.
  • PFF interest rate is exclusive.
  • Financial liquidity.
  • Loan facility.
  • Exemption from Income Tax i.e., EEE status as per the Income Tax Section 80C.
  • Risk level is very low.
  • Minors can also open PPF account.
  • PPF Renewal/ extension period is for 5 years.

PPF Disadvantages

  • A joint account is not possible for PPF.
  • No liquid cash.
  • HUF’s and Trust are not eligible to open PPF account.
  • NRI’s also can’t open PPF account.
PPF Calculator

What is Equity Linked Saving Scheme?

The ELSS is a type of mutual fund with a Tax exemption under section 80C of Indian Income Tax. The two major advantages of ELSS are capital appreciation and tax benefits. It is available in most f the banks in India. The lock-in period is 3 years; it means you can take off money after 3 years. For this scheme, the Income tax deduction is Rs. 1.5 lakhs from the taxable income. This equity scheme is a long-term beneficial saving scheme.

The compound annual growth rate (CAGR) of ELSS 17% in the last 10 years. ELSS mutual fund is a tax efficient investment. Tax deduction of ELSS comes under the category of EEE (Exempt, Exempt, Exempt). This ELSS is so flexible because it has a less lock period. So, that you can withdraw your money whenever you want. ELSS is suitable for the people who are far to retirement. Using this ELSS scheme, you can get the good share market return opportunity.

 ELSS Benefits:

  •  No maximum limit for investment.
  • 100% Tax-free.
  • Lock in period is less i.e., 3 years.
  • Best of all mutual fund schemes.
  • All kinds of people can apply i.e., no age limit.
  • Creates long term wealth.
  • Open-ended investment.
  • Premature Withdrawal funds.

ELSS Disadvantages

  • No guarantee of returns.
  • Many documents are necessary to open the account.
  • No premature returns.
  • Market fluctuations.

PPF vs ELSS Interest Rates

First of all, we all observe the interest rates in any scheme we invest. So, we have given the past few years interest rate comparison of ELSS vs PPF in the below table. Therefore, it will be more easy to compare the PPF vs ELSS returns. The PPF, ELSS interest rates are not fixed, they vary every year. Just observe below the table and decide the best mutual fund scheme. Usually, the interest rates issued from April 1st of the present year to March 31st of the next year.

PPF & ELSS Interest Rates
2016  8.10%  –
2015 8.70%  –
2014   8.70%  50.63%
2013  8.70%  6.53%
2012  8.80%  30.94%
2011  8.0%  -23.86%
2010  8.0%  19.00%
2009  8.0%  81.94%
2008  8.0%  -55.55%
2007  8.0%  56.71%
2006  8.0%  30.33%
2005  8.0%  53.08%

Compare ELSS vs PPF Features

Objective  PPF ELSS
 Nature  Very Secure, less risky as it is bonded by government of India  Diversified Equity mutual Fund which is  volatile and risky
 Interest Rate  8.10%  15% (approx)
 Tax Exemption  EEE  EEE
 Lock in Period  15 years  3 years
 Maximum Duration  15 years  No such duration limit
 Risk Level  Low  High
 Deduction Limit  Up to 1.5 lakhs  Up to 1.5 lakhs

After you decide the best saving scheme PPF vs ELSS, you need to open a account whether it may be PPF or ELSS. So, we have given the most popular ELSS mutual funds and the banks with PPF scheme facility.

  Top best ELSS Funds

  • Axis Long Term Equity Fund.
  • ICICI Prudential Tax Plan.
  • Religare Invesco Tax Plan.
  • Franklin India Tax Shield Fund.
  • Canara Robeco Equity Tax Saver Fund.
  • Birla Sun Life ELSS Fund.
  • TATA India Tax Saving Fund.
  • IDFC Tax advantage Fund.
  • BNP Paribas Long Term Equity Fund.

List of Banks For Opening PPF Account

Coming to the PPF account, you may open this Public Provident Fund in any of the below-nationalized banks or the post office. Top Banks for the PPF account opening are as follows.

  • SBI PPF Account.
  • ICICI PPF Account.
  • Vijaya Bank PPF Account.
  • Andhra Bank PPF Account.
  • UCO Bank PPF Account opening.
  • Axis Bank PPF Account.
  • Canara Bank PPF Account.
  • Bank of Baroda PPF Account.
  • PNB PPF Account.
  • Indian Overseas Bank PPF Account.
  • Dena Bank PPF Account.
  • Oriental Bank PPF Account opening.

For furthermore, details about the Public provident fund and Equity liquidity Saving Schemes regularly visit our site.

Updated: February 23, 2017 — 12:44 pm


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  1. Can we transfer my ppf account from post office to bank ?

  2. How I can invest in ELSS

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