Question
Write two advantages each of recurring savings scheme of Bank and Public Provident Fund (PPF) scheme.
Solution
| Recurring Savings Scheme | Public Provident Fund |
| It is a good saving scheme for the middle class. Which has a fixed amount of revenue as its monthly income. | It is an ideal option for both salaried as well as self -employed classes. |
| It is also suitable for small-time businessmen, traders etc. as they do not have to block a large sum, which is a requirement for other types of savings instruments. | Investment up to 100000 per annum qualifies for IT Rebate under section 80 C of IT Act. |
| Students can open recurring deposit accounts with their pocket money they get from the parents. | The rate of interest is high (8.70% per annum) |
| Minimum amount of deposit is Rs. 10 No maximum limit. | Loan facility available from 3rd financial year up to a 5th financial year. |
| Once started and once one gets habituated for a couple of months, then it is taken as a fixed monthly expenditure. | Withdrawal permitted from the 6th financial year. |
| It is a very liquid form of investment. That is whenever an unexpected urgent need for additional cash arises, money could be used and again continued. | Free from court attachment. |
