If you want an investment option that is tax-free, protected by the government and beneficial in the long term, Public Provident Fund (PPF) is a popular and trusted option. But the question is whether in today’s era, when both inflation and stock market (Sensex) are changing rapidly, is PPF still equally beneficial? In the 1990s, interest on PPF was up to 12%, but with time these rates fell and since 2020 till now it is stable at 7.1%. On the other hand, Sensex has given an average CAGR return of 12.2% in the last 10 years, while the average inflation rate has been 4.79%. However, capital gains tax has to be paid on stock market earnings, whereas PPF is completely tax-free and tax exemption under 80C is also available on investments up to ₹ 1.5 lakh annually. In this video/post we will understand how PPF has performed against inflation and the stock market, and whether it can still be considered a smart investment option.
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