In recent years, investors are drawn to mutual funds instead of fixed return schemes like PPF and NSC. Last 2-3 years there has also been a significant increase in investments toward ELSS (Equity linked Saving schemes). Reason in one word is “returns”. Interest on small savings schemes have come down, (PPF interest rate came down from 8.7 percent in 2016 to 7.6 percent at present) a few good ELSS mutual funds have given investors over 15 % CAGR (Compounded Annual Growth rate) for last over 10 years.
Tax Saving FD vs PPF vs ELSS (Broad Comparison)
Having understood the features of each of these individually, let us now compare these three on broad parameters which are responsible for the choices one makes.