PPF vs SIP: The majority of individuals invest these days. On the other hand, individual choices for investing options could differ. A lot of people choose to put their money into schemes that promise returns while keeping the invested amount safe. However, some people prefer to take a small risk in order to increase their gains. Mutual Funds SIP and PPF are two examples of these plans. PPF is a government-guaranteed programme that requires long-term investment.
Investment Duration and Maturity Periods
PPF takes 15 years to mature. SIP, on the other hand, is a market-linked plan that offers the potential for increased profits but does not guarantee returns. You are free to run a SIP for as long as you like and take money out whenever you’d like. Long-term SIP, however, is thought to be a profitable transaction. Let us tell you how much money will be made in each scheme after 15 years of monthly investments of Rs 5,000 in each.
Current Returns and Interest Rate
Right now, this government-guaranteed programme yields returns of 7.1 percent. You will invest Rs 60,000 a year in this scheme if you contribute Rs 5000 a month. In this instance, your 15-year investment will equal Rs 9,00,000. As per clause 7.1, you will receive interest of Rs 7,27,284; therefore, upon maturity, you will receive a total of Rs 16,27,284 inclusive of interest.
Risk and Returns in SIPs
Investment in SIPs is somewhat risky because they are market-linked, although experts in finance say that the average interest rate is 12 percent. There are instances when the interest is greater still. If you use Systematic Investment Plans (SIPs) to invest Rs 5,000 per month in mutual funds, you will invest Rs 60,000 a year, or a total of Rs 9,00,000 in 15 years.
You will receive only Rs 16,22,880 in interest if the computation is based on a 12% average return. This implies that the amount of money you will receive from PPF at maturity can be obtained virtually entirely through interest alone. In this case, you will receive a total of Rs 25,22,880 after 15 years, which includes the money you invested and the interest. This sum may be more if the return is higher than 12 percent.
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