Why are my bank executives insisting that I buy ULIPs over PPF and ELSS?
The flexibility of switching funds does sound enticing but taking the current market scenario which one seems more fruitful?

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Because they make more commission on ULIPs


I too was recently in the same dilemma. Since I’m a newbie, I’m playing safe: For exemptions under 80C and have planned to increase my PF to 20% and invest the rest in ELSS (about 5k per month).

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@Sameera @Suhani This is how I do it. I get EPF, which is dependent on my basic, so I do not control it (atleast, not directly).

My investment in ELSS = 150000 - EPF - Term insurance premium

EPF, term insurance and ELSS are the only options I use in 80C. The amounts in ELSS and EPF will be touched only at the time of my retirement and according to my calculations, I will not need to do any other investments for my retirement goal (hoping I keep it the same way though :)), which is around 25 years away.

If you do not have EPF component in your salary then go for PPF. I would suggest you to go for (100-your age)% of 150000 in ELSS and rest in EPF or PPF (dont forget to calculate your life insurance requirements and take a term plan)


PPF account has a maturity period of 15 years, so it would be ideally aligned with long-term goals which are at least 15 years away, such as one’s retirement. Also, I believe that while investing for long-term goals, one should invest more in those assets which give higher returns and be more than a mere tax saving instrument.

If not completely, then at least one big part of our investment should go to ELSS. Short-term volatility should not be an excuse to avoid an asset, which gives higher returns in the long-term.

I agree with @RiaKhillan
In fact In the last 11 years, there was a 93.25% probability of having excess returns in ELSS funds as compared to other traditional tax-saving alternatives like PPF and Fixed Deposits.

The PPF is NOT an alternative to ELSS, or vice versa.

Investors tend to make the grievous error of assuming that all investments that fall under Section 80C are similar and can be blindly compared – ELSS, PPF, NSC, 5-year bank deposits. This reveals all that is wrong with most individuals’ tax-planning strategy.

PPF and ELSS are not similar asset classes and must not be pitched against each other without taking the individual’s profile and overall portfolio into account.

Totally depends upon your risk appetite.

Yes @Suhani ani, ULIP does offer the ability to switch between funds such as Equity, Debt, Hybrid, Balanced, or money market funds etc. but Lacks fund transparency as to where the money is getting invested.


ELSS is pure Equity product and PPF is pure debt option.

So you can’t compare orange and banana with each other.

But what you can do is make a good fruit salad of these 2 for enjoying all 2 fruits. Same can be done with PPF and ELSS. You can divide the amount among 2 as per your age and risk profile.

You can combine PPF+ELSS as most tax payers do to enjoy benefits of equity and debt asset classes.

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ULIPs is High risk, capital and return not guaranteed but atleast life coverage is guaranteed unlike ELSS which is highly risky and nothing guaranteed!

Wisdom says that never mix investments and insurance. if you are really looking for life cover, go for term policy, that’s cheaper and best way to protect. investments is way different decision and have many options to get return.