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NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2) · Comparison of Products Across Categories

Which statement correctly compares a Public Provident Fund (PPF) account with a bank fixed deposit for a long-term, risk-averse investor?

PPF has a long 15-year lock-in with a government-notified interest rate and sovereign backing, whereas a bank fixed deposit offers flexible tenures. PPF has an annual deposit limit and its rate is not market-linked daily.

  1. APPF has a long lock-in with sovereign-backed, government-notified interest, while an FD has flexible tenureCorrect
  2. BPPF interest is market-linked and changes daily
  3. CA bank FD has a fixed 15-year lock-in
  4. DPPF allows unlimited annual deposits

Explanation

PPF has a 15-year tenure with limited partial withdrawals and a government-notified rate, backed by the sovereign. FDs offer flexible tenures. PPF has an annual deposit cap and its rate is reset periodically, not daily.

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