PPF vs FD vs NSC vs ELSS: This is how much you can earn
In India, there are plethora of savings schemes to help you build your wealth, such as FD, PPF and NSC among a few. However, the returns of these schemes are mostly taxed, but ELSS on the other hand has dual benefit - as its return are usually higher and only partially taxable.
According to ClearTax report, a 5-Year Bank Fixed Deposit gives you returns ranging from 6% to 7% with 5 year lock in period and is taxable. Image source: PTI
Then there is PPF which gives higher return than FDs between 7% to 8% but has lock in period of 15 years. One good thing about PPF is the returns are not taxable. Image source: Reuters
Meanwhile, there is National Savings Certificate and NPS which give returns between 7% - 8% and 8% - 10%, with lock-in period of 5 years till retirement. Image source: PTI
The returns on NSC is taxable, whereas NPS is partially taxable. Image source: Reuters
Compared to the above schemes, ELSS has capability to give guaranteed returns between 10% to 18%, and has lock-in period of 3 years with returns partially taxable. The returns can be even higher than 18% in many cases. Image source: PTI