Both ELSS and PPF have certain advantages as well as limitations. So depending upon your requirements and risk appetite, you can choose which is better for you while keeping the following points in mind:
Tax benefits: PPF is the most tax-friendly investment option as the interest earned is also entirely tax-free. In the case of ELSS, only capital gains up to Rs. 1 lakh are tax-free.
Liquidity: ELSS offers more liquidity in the sense that they have a lock-in period of 3 years. In comparison, PPF has a lock-in period of 15 years.
Risk: PPF offers an almost risk-free return, whereas ELSS investments are subject to market fluctuations.
Return: In general, ELSS mutual funds offer higher returns as compared to PPF.
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