If you’re looking to save tax under Section 80C, you’ll likely consider Fixed Deposits (FD), Public Provident Fund (PPF), and Equity Linked Savings Schemes (ELSS). Let’s compare these three.
1. Fixed Deposit (FD)
- Tenure: 5 years (tax-saving FD)
- Return: ~6.5% (taxable)
- Risk: Low
- Lock-in: 5 years
2. Public Provident Fund (PPF)
- Tenure: 15 years
- Return: ~7.1% (tax-free)
- Risk: Very Low
- Lock-in: Partial withdrawals after 7 years
3. Equity Linked Savings Scheme (ELSS)
- Tenure: 3 years (shortest lock-in)
- Return: ~10-15% (market-linked)
- Risk: High
- Tax: LTCG tax on gains over ₹1 lakh
Summary Table:
| Investment | Lock-in | Risk | Returns | Tax Benefit |
|---|---|---|---|---|
| FD | 5 yrs | Low | 6.5% | 80C (Taxable) |
| PPF | 15 yrs | Very Low | 7.1% | 80C (Tax-free) |
| ELSS | 3 yrs | High | 12% avg | 80C (LTCG) |
Final Verdict
- Choose FD if you want capital safety.
- Choose PPF for long-term, stable, tax-free returns.
- Choose ELSS for higher growth and short lock-in if you can handle market risk.
Mixing all three based on your financial goals can be a smart strategy.
