PPF vs ELSS: What is the right allocation for your investments?



Public Provident Fund (PPF) and Equity Linked Saving Scheme (ELSS) are two different types of investments. Though it is difficult to compare the two, the right strategy to invest in these can prove very lucrative for you. Money 9 Helpline hosted Viral Bhatt, founder, Money Mantra to help you understand how you can include PPF and ELSS in your investments

Edited excerpts

​Vivek Goenka: My 80C is already completed with the PF which my employer deducts, still I invest Rs 1.5 lakh in PPF every year for my child’s education and Rs 2500 per month in Mirae Asset Tax Saver. For my retirement in ELSS funds as it gives a good return, is my approach correct, I already have an equity portfolio as well. Can I choose the ICICI Pru arbitrage fund to park my emergency fund? ​I heard arbitrage funds are taxed on the equity model and give a relatively better return than FD and liquid funds.

Bhatt: For education purposes, your debt strategy suffices the purpose so you don’t need to separately consider PF for that. ELSS is linked to equities as I explained earlier equity can push the returns over a period of time. Your fund is also good. In the case of arbitrage funds, it is good for liquidity. I would suggest for liquidity keep both arbitrage and liquidity fund in your portfolio. Just don’t depend solely on the arbitrage funds.

Watch the full video to know more…