NSC or PPF which is

better than Bank Deposits?

Evaluate the statement
Presented By : Group 1
NAMES ROLL NO
Nikita amil 04

Tanishka dalvi 10

Priyanka nankani 18

Tamanna rohra 28

Bhakti shinde 36
SR NO INDEX PG NO.
1

National Savings Certificate 3-8

 2

Public Provident Fund 9-14

3

Trends Of PPF 15-16

 4

Bank Deposits 17-19

5

Suggestions 20
 6

Conclusion 21
National Savings Certificate

 National savings certificate i.e NSC is an investment savings scheme backed by the
government of India.
 NSC can be purchased from any post office in India and these certificates are
issued on electronic mode.
 A Government of India initiative, it is a savings bond that encourages subscribers –
mainly small to mid-income investors – to invest while saving on income tax.
 A fixed-income instrument like Public Provident Fund and Post Office FDs, this
scheme too is a secure and low-risk product.
 There is no maximum limit on the purchase of NSCs, but only investments of up to
Rs.1.5 lakh can earn you a tax break under Section 80C of the Income Tax Act. The
certificates earn a fixed interest, which is currently at a rate of 6.8% per annum.
 Eligibility Documents
The following are the key eligibility  Completely filled out NSC Application
criteria for making National Savings form
Certificate investments:  Recent Photograph
 All resident Indians are eligible to  Identity proof – Aadhaar card, PAN,
invest in NSCs.
etc.
 Non-resident Indians cannot purchase  Address proof – Aadhaar card, Voter
new NSCs. Trusts and Hindu
ID, etc.
Undivided Family (HUFs) cannot make
NSC investments.  Cash/cheque deposit of the amount to
be invested
 Karta of HUFs can make NSC
investments only in his own name.  These documents can be submitted at
any India Post Office to obtain NSC in
applicable denominations.
Features of NSC

 Fixed Rate of Income

 A Tax saver
 A small start
 Fixed Interest rate
 Availability of Loan collateral
 Easy Access
 Nomination facilities
NSC Variants:
Feature NSC Issue VIII NSC Issue IX

Denominations INR 100 to INR 10,000 (in multiples of 10) INR 100 to INR 10,000 (in multiples of 10)

Maturity Period 5 Years 10 Years

Investment Limit No Limit No Limit

Minimum Investment Allowed INR 100 INR 100

Interest Rate Flexible but slightly lower than Issue IX Flexible but slightly higher than Issue VIII

Anyone Indian barring Hindu Undivided Families

Available to Anyone Indian
and Trusts
Types of certificates:

 Single Holding Certificates

 Joint Holding A Type
 Joint Holding B Type
About PPF

 PPF stands for Public Provident Fund .

 The Public Provident Fund is a savings-cum-tax-saving instrument in India.
 introduced by the National Savings Institute of the Ministry of Finance in 1968.
 The aim of the scheme is to mobilize small savings by offering an investment with
reasonable returns combined with income tax benefits.
 The scheme is fully guaranteed by the Central Government.
 Balance in PPF account is not subject to attachment under any order or decree of court.
However, Income Tax & other Government authorities can attach the account for
recovering tax dues.
 Eligibility

 Resident
 Non resident Indians
 As of August 2018, as per the Indian Ministry of finance (Department
of Economic Affairs), NRIs (Non resident Indians) are not allowed to
open new PPF accounts.
 However, they are allowed to continue their existing PPF accounts up
to its 15 years maturity period. 
 Duration of scheme
 Original duration is 15 years. Thereafter, on application by the
subscriber, it can be extended for 1 or more blocks of 5 years each.
Investment

 A minimum deposit of 500/- 

 A PPF account holder can deposit a maximum of 1.5 lacs in his/her PPF account (including those
accounts where he is the guardian) per financial year.
 There must be a guardian for PPF accounts opened in the name of minor children.

Nomination
 Nomination facility is available in the name of one or more persons. The shares of nominees may
also be defined by the subscriber.

PPF defaults
 Account deactivation.
 To activate the bearer needs to pay 50 as penalty for each inactive year.
 Loans
• Loan facility available from 3rd financial year up to 6th financial year. Public Provident Fund
Scheme, 2019 has reduced the interest spread to 1 (one) percent form earlier spread of 2
percent.
• Up to a maximum of 25 % of the balance at the end of the 2nd immediately preceding year
would be allowed as loan. Such withdrawals are to be repaid within 36 months.
• Inactive accounts or discontinued accounts are not eligible for loan.

 Withdrawals from PPF account

• Full withdrawal - AFTER MATURITY.

• pre-mature withdrawals – 7th financial year.
• The maximum amount that can be withdrawn pre-maturely is equal to 50% of the amount that
stood in the account at the end of 4th year preceding year or the end of immediately preceding
year whichever is lower.
Account transfer or closed
 PPF account can be closed after the completion of 15 years In which initial
subscription was made.
 In case of death of the account holder the balance amount will be paid to the nominee.
The nominee cannot continue the account by making fresh subscription to it.
 Transfer of account can be done.

PPF tax concessions

 Annual contributions qualify for tax deduction under Section 80C of income tax. The tax
benefit is capped at 1.5 lacs per financial year.
 PPF falls under EEE (Exempt ,Exempt ,Exempt ) tax basket. Contribution to PPF account
is eligible for tax benefit under Section 80C of the Income Tax Act. Interest earned is
exempt from income tax and maturity proceeds are also exempt from tax.
Advantages and Disadvantages

Advantages
 Risk-free guaranteed returns
 Multiple PPF tax benefits
 Small savings, good returns
 Liquidity with partial withdrawal and loan facilities
 Flexibility of tenure

Disadvantage
 NRIs cannot open PPF account
 Co-ownership of PPF account
 HUFs PPF account
Trends of PPF
Interest of PPF
1 April 2020 – 30 June 2020 7.1
1 October 2019 – 31 March 2020 7.9
1 July 2019 – 30 September 2019 7.9
1 April 2019 – 30 June 2019 8.0
1 January 2019 – 31 March 2019 8.0
1 October 2018 – 31 December 2018 8.0
1 January 2018 – 30 September 2018 7.6
1 July 2017 – 31 December 2017 7.8
1 April 2017 – 30 June 2017 7.9
1 October 2016 – 31 March 2017 8.0
1 April 2016 – 30 September 2016 8.1
The interest on PPF is compounded annually. The formula for
this is: F = P[({(1+i)^n}-1)/i]
 Bank deposit
A deposit account is a bank account maintained by a financial institution in which a
customer can deposit and withdraw money. Deposit accounts can be savings
accounts, current accounts or any of several other types of accounts
 What is Recurring Deposit Account?
 Recurring deposit account or RD account is opened by those who want to save certain amount of
money regularly for a certain period of time
 RD’s provide much higher interest than regular saving account
 Investment tenure ranges from 6 months to 10 years
 Interest rate :- 3.00% to 9.00%
 Minimum deposited amount: Rs.10

 What is Fixed Deposit Account?

 In Fixed Deposit Account (also known as FD Account), a particular sum of money is deposited in a
bank for specific period of time.
 Tenure ranges from 7 days to 10 years
 Guaranteed returns
 Interest rate:- for senior citizens- ranging from 3.50%- 9.75% depending on amount and deposit tenure
for others :- 3.50 to 8.00%
 Minimum amount :- Rs.50
 Analysis of Fixed Deposit and Public Provident Fund

Fixed Deposit : Public Provident Fund:

1. Meaning :- A particular amount is 1. PPF is a long term investment backed
deposited for a fixed period of time by the government of India which
offers safety
2. Return on investment:-3.50% - 9.75%
2. 7.1%
3. Tax deductions:-under 80c, claim the
deduction for investment up to Rs, 1.5lakh 3. Under 80 c there is no tax on deposit ,
and interest earned is taxable. interest earned and on maturity

4. Amount required:- Depends On Banks 4. Min amount : Rs.500 & max :-

1,50,000
5. Premature withdrawal:- Penalty May
Charge 5. Starting 7th year

6. Loan against investment :-Depends Upon 6. After 3 year

The Bank
Suggestions

 A person who wants both tax free returns and less risky investment can opt for PPF
 One of the Best option for those who are self employed.
 Option for investor to open PPF account in the name of minor child.
 Once child turns 18, it can have a separate income.
Conclusion

 Sense of purpose to the investment.

 PPF — Higher returns
 Returns backed by government
 Enjoys a E-E-E status
 Best option for those who are ready to lock their amount for more years.
THANK YOU
Bhakti Shinde- 36
[email protected]