KVP, PPF, NSC Which is best? Comparison Chart with interest rates
KVP, PPF, NSC Which is best? Comparison Chart. Check Comparison Chart – KVP, NSC and PPF. Check Compression between KYP, NSC and PPF. There are so many options available for investment. Don’t get confused though. This article will spill out the options, their benefits and drawbacks. So read more on KVP, PPF, NSC Which is best? from below…
KVP, PPF, NSC Which is best? Comparison Chart
The Below mentioned points have been explained in detail below:
|KVP (kisan Vikas Patra)||PPF (Public Provident Fund)||NSC (National Savings Certificate)|
|Interest rates||7.8% (from April 1st 2016)||8.10%||8.10 ( for 5 years)|
|Period till maturity||8 years 4 months||15 years||5 years or 10 years|
|Tax benefit for investing in the instrument||No tax benefit||Covered under Section 80C||Covered under section 80C|
|Tax Benefit at the time of maturity||Additional income in the nature of interest is taxable at the time of maturity.||Tax benefit extends to maturity proceeds also, because maturity proceeds are also tax free.||Additional income in the nature of interest earned is taxable at the time of maturity.|
|Taxability with respect to interest||Taxable||Not taxable||Taxable|
|Minimum Investment required||Rs.1000||Rs.100||Rs.500 per annum|
|Maximum Investment threshold||No such upper cap.||Rs.150000 per annum||No such restriction for maximum investment|
|Lock in period||2 years and 6 months (The investor can redeem every 6 months after expiry of this lock in period)||Premature withdrawl allowed after 6 years but subject to certain condition (refers below in points to remember)||Premature withdrawl allowed at any time , but allowed only under certain situations like death of holder , forfeiture of the policy etc|
|Who can invest||Only individuals by themselves or in joint names , can buy the KVP.||Only one account allowed to be opened per person.However only individuals can open PPF account.NRI , foreigners and Karta (on behalf of HUF) cant open PPF account.||Any other person than Trust and HUF can subscribe to NSC.|
|Where it is to be opened||At post office||At any post office or bank||At post office|
|How they are treated at the time of pledging or taking loan||They can be pledged as security or collateral for obtaining loan from any bank.||Loan against PPF account is granted only between 3rd year till 6th year. This makes it clear that no loan can be secured from year 7 because partial withdrawl is allowed from year 7.||NSC can be kept as collateral for loan purpose.|
|Transfer||KVP are freely transferable and can be transferred any number of times.||Funds can be transferred between bank branches or post offices , but no such transfer allowed between other people.As such this instrument is not transferable.||Transfer allowed , however name of original owner is still mentioned on the certificateand new owner’s name will be mentioned by rounding off original owner’s name.|
Important points to remember
- KVP also allows premature withdrawl before 2 years and 6 months under certain circumstances like death of the holder or forfeiture etc.
- In case of PPF, only partial premature withdrawl allowed from year 7. This makes it clear that withdrawl at the time of maturity only could be at full value.
- Joint accounts are not permissible for Public Provident Fund (PPF) account.
- Interest rate on KVP is very less, however it is best investment instrument for those who warrant liquidity , risk averse investors. Probable more suitable for rural or semi urban investors who do not have bank facility.
- EEE (Exempt investment at inception and during the life of instrument till maturity and Exempt maturity proceeds) pattern and high wealth appreciaation due to longer term is attractive.Hence the investors who do not bother about liquidity and are medium risk takers , should opt for PPF.
- NSC is again high interest , but is in taxable area.So the investors who are below tax threshold and are concerned about liquidity as compared to bank FD , should go for NSC.
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