As the financial year draws to a close, many investors find themselves in the classic dilemma of where to park their remaining ₹50,000 to maximize their returns while minimizing taxes. With March 31st fast approaching, it’s a critical time for tax-saving investments. The three popular options—Public Provident Fund (PPF), Equity-Linked Savings Scheme (ELSS), and Sukanya Samriddhi Yojana (SSY)—each come with their unique benefits, and the right choice depends on your investment goals, risk tolerance, and time horizon.
Additionally, with EPFO interest rates projected to stay around 8.1% for FY 2026, it’s important to consider how other schemes compare in terms of returns, tax benefits, and safety.
In this blog, we’ll explore these three options and help you decide where to put your last ₹50,000 before the end of the financial year.
1. Public Provident Fund (PPF)
PPF is one of the safest and most tax-efficient investment options available in India. Here’s why you might consider putting your ₹50,000 into a PPF account:
Pros:
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Tax Benefits: Contributions to PPF are eligible for tax deductions under Section 80C of the Income Tax Act. The interest earned and the amount received at maturity are also tax-free.
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Interest Rate: For FY 2025-2026, the PPF interest rate is expected to be around 7.1% (though it’s reviewed quarterly by the government). This is lower than EPFO’s projected 8.1% rate for the year but still attractive considering its tax-free status.
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Safety: PPF is backed by the Government of India, making it a risk-free investment.
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Lock-in Period: The PPF comes with a 15-year lock-in period, but partial withdrawals are allowed after 6 years, and you can extend the tenure in blocks of 5 years after maturity.
Cons:
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Long-Term Commitment: The 15-year lock-in might not be ideal for someone seeking more flexibility.
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Moderate Returns: With returns around 7.1%, PPF might not give you the high returns seen in equity-based schemes like ELSS, though it is much safer.
Best For:
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Risk-averse investors looking for long-term tax-saving options.
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People with a longer investment horizon (since PPF has a 15-year lock-in).
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Those looking to build a steady corpus with government-backed safety.
- Check PPF Calculator for returns
2. Equity-Linked Savings Scheme (ELSS)
ELSS is a tax-saving mutual fund scheme that invests primarily in equities, offering the potential for higher returns in the long term. If you’re willing to take on more risk for potentially higher returns, ELSS might be the right choice for you.
Pros:
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Higher Returns: ELSS typically offers higher returns than traditional instruments like PPF. Over the long term, they have the potential to give you returns of 12%-15% annually, though it’s subject to market risks.
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Tax Benefits: ELSS investments qualify for tax deductions under Section 80C (up to ₹1.5 lakh) and have a 3-year lock-in period.
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Liquidity: After the 3-year lock-in, your funds are more liquid compared to PPF, and you can redeem them when required.
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Diversified Portfolio: ELSS funds usually invest in a mix of large, mid, and small-cap stocks, providing diversified exposure to the equity market.
Cons:
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Market Risk: Since ELSS is equity-based, it is subject to market volatility, and there is a risk of capital loss.
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Short-Term Uncertainty: While the long-term outlook for equity investments is positive, short-term market fluctuations can affect your returns.
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Lock-in Period: Even though the lock-in is shorter (3 years), it still limits access to your money in the short term.
Best For:
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Investors with a high-risk tolerance who can afford to ride out market fluctuations.
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Those looking for long-term growth of wealth (3 years and beyond).
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Investors seeking higher returns than fixed-income options like PPF or FD.
- Check ELSS Calculator Returns
3. Sukanya Samriddhi Yojana (SSY)
Sukanya Samriddhi Yojana is a government-backed savings scheme targeted at parents of girls below the age of 10. If you have a young daughter and want to save for her education or marriage, SSY can be an excellent option.
Pros:
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Tax Benefits: Contributions to SSY are eligible for tax deductions under Section 80C. The interest earned and the amount at maturity are also tax-free.
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Attractive Interest Rate: The SSY offers one of the highest interest rates among government-backed schemes, with the rate currently at 7.6% (as per the latest update). This is slightly higher than the expected PPF rate but still lower than EPFO’s projected rate.
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Safety: The scheme is backed by the Government of India, making it extremely safe.
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Long-Term Goal-Oriented: SSY is ideal if you’re saving for your daughter’s education or marriage.
Cons:
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Eligibility Restrictions: SSY is available only to parents or guardians of girls under 10 years of age. This limits its applicability if you don’t have a daughter.
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Lock-in Period: SSY has a 21-year lock-in period, or until the girl turns 18. While you can make partial withdrawals once the girl turns 18, the long lock-in may not suit everyone.
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Investment Cap: You can invest a minimum of ₹250 and a maximum of ₹1.5 lakh annually, which could limit higher-income investors from using this scheme as a large part of their savings strategy.
Best For:
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Parents or guardians of young girls who want to save for their education and marriage.
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Long-term investors who can lock away the money for extended periods.
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Risk-averse individuals seeking a government-backed savings scheme with decent returns.
- Check Sukanya Samriddhi Yojana (SSY) Calculator
Where Should You Put Your ₹50,000?
Given the above comparison, the right choice largely depends on your financial goals, risk tolerance, and investment horizon:
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If you want a safe investment with tax benefits and don’t mind locking your money for 15 years, PPF is a solid option.
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If you are willing to take on more risk in exchange for the potential for higher returns, ELSS may be the best option. It’s perfect for long-term wealth building.
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If you are a parent of a young girl, Sukanya Samriddhi Yojana offers excellent returns and tax benefits for your daughter’s future needs.
For the last ₹50,000 before March 31, your decision should align with your financial priorities. If you’re looking for tax-free returns with low risk and a longer investment horizon, PPF or SSY would be great options. However, if your risk tolerance is higher and you have a long-term horizon, consider investing in ELSS.
FAQs
Q1: What is the expected EPFO interest rate for FY 2026?
A1: The EPFO interest rate for FY 2026 is projected to stay around 8.1%, offering steady returns for salaried employees. This is higher than traditional investment schemes like PPF and SSY but comes with different tax implications.
Q2: Can I invest ₹50,000 in PPF?
A2: Yes, the maximum investment you can make in a PPF account per financial year is ₹1.5 lakh. So, investing ₹50,000 in PPF is possible, and it will help you save taxes under Section 80C.
Q3: How much tax do I save on ELSS investments?
A3: ELSS investments are eligible for tax deductions under Section 80C, up to ₹1.5 lakh per year. This helps reduce your taxable income and potentially lower your tax liability.
Q4: Can I invest in both PPF and ELSS in the same year?
A4: Yes, you can invest in both PPF and ELSS within the same year, provided the total amount invested does not exceed the limits set by Section 80C (₹1.5 lakh).
Q5: Is Sukanya Samriddhi Yojana available for boys?
A5: No, SSY is available only for the daughters of Indian parents or guardians. The scheme is designed to encourage saving for the education and marriage of young girls.
Conclusion
Where to put your last ₹50,000 before March 31 ultimately depends on your goals, risk profile, and the time horizon for your investments. Whether you choose PPF for its safety, ELSS for higher returns, or Sukanya Samriddhi Yojana for your daughter’s future, each scheme offers unique benefits.