PPF and LIC are completely different schemes of savings, PPF provides savings with tax-free benefits with the gain of interest rates and LIC offers insurance and protects your family for the unfortunate death of the subscriber. Each one has its unique importance but which one to choose if we get clear info about both the schemes, we could choose the best one. to compare these two investment options here are the facts to be considered.
People often confused about the investment options either to go investment with insurance or to go for investment with tax-benefit savings. But which one to choose, is always a question?
PPF: PPF or Public Provident Fund is the long-term savings plan, which benefits the individual with tax-free savings and returns. LIC: Life Insurance Corporation or LIC Jeevan Anand is the Life insurance policy that gives protection to the family members of the LIC subscriber, giving protection for any unexpected risk.
A comparison between PPF and LIC
| Category | LIC | PPF |
|---|---|---|
| Scheme | Insurance | Investment |
| Purpose | Risk Protection | Safest savings |
| Risk | Safe | Safe |
| Target Audience | Caters those who have dependents | Everyone |
| Tenure | Flexible | 15 years |
| Premature closure | Allowed with penalty | Not allowed |
| Loan | Loan facility available | Loan facility available |
| Tax Deduction | Eligible | Eligible |
Insurance is the biggest difference between the two plans
LIC - offers life cover and the safest plan but one can does not expect higher returns from this policy. PPF - Public provident fund does not offer life cover, but helps to build a corpus for your retirement, and helps you gain good returns with no tax.
Returns
PPF - Returns are more superior in PPF than LIC, PPF offers an interest rate of 8.7% (interest rates varies annually), in the end, this will be a good sum of savings that is your saved money and your interest comes out as a good return with no tax. LIC - LIC does not match the returns ads PPF subscribers cannot even expect at least 4.5% of interest, the returns of LIC are not that satisfactory as like PPF.
Benefits of Tax deduction
Both LIC and PPF offers tax deduction under act 80C of the Income tax. Both the plans offer tax exemption up to 1.5 lakh per annum. So, subscribes looking for tax exemption both the plans are good at tax deduction.
Conclusion
Both the plans for investment but, protection is more important than savings. Where LIC offers life cover and protection compared to PPF, in such contrast you should first protect your family and later you can think of savings with PPF. So, get you LIC Jeevan Anand for protecting your family, once you have secured your family now you can go for savings with PPF.