Mutual funds can be invested in SIP or PPF to prepare large funds in the long term. Both are different products. Both have different features. Through SIP, you can invest in the equity scheme of mutual funds. PPF is the government’s scheme, which is completely safe to invest in it. Let us know what it will be right for you to invest in.
PPF attractive for those who do not take risk
If an investor does not want to take risk at all, then for him Public Provident Fund ,Ppf) It will be right. This is a fixed income investment option. This means that before starting investment, the investor knows how much money he is investing, how much it will increase by 15 years. If a person is investing in PPF for his children’s higher education, marriage or his retirement, then he already knows how much money will come in his hand after maturing the account.
Risk in investment in mutual funds is associated
The equity scheme of mutual funds invests money from investors in shares of companies. Through SIP, you can invest in the equity scheme of mutual funds every month or every quarterly. Mutual funds do not have any kind of maturity. You can continue investing as long as you want. Since mutual funds invest the money of investors in shares, then there is a risk connected in it. According to market ups and downs, the return on investment may decrease or increase.
Calculation of PPF returns
Suppose you invest Rs 1,44,000 every year in PPF. You have to invest this for 15 years. After 15 years, PPF account gets matured. This means that you will invest Rs 21,60,000 in 15 years. Since the interest rate of PPF is 7.1 percent, after 15 years your money will increase to Rs 39,05,481. This means that you will get a total return of Rs 17,45,481 on your investment.
Calculation of Sip Return
Now we assume that you invest Rs 12000 every month in the equity scheme of Mutual Fund to Mutual Fund. In this way you will invest a total of Rs 1,44,000 in a year. You have to make this investment for 15 years. We can assume the annual return of the equity scheme. In this way you invest a total of Rs 21,60,000 in 15 years. After 15 years your money will increase to Rs 57,11,177. In this way you get a return of Rs 35,51,177 on your investment.
What should you do?
In this way, you get more returns to invest from SIP than investing in PPF. You need to keep two things in mind. First, investing in PPF provides the benefit of deduction. If you use the Old Reizim of Income Tax, then you can claim this deduction. Second, PPF is a government scheme, which is quite safe. PPF returns have no effect on the ups and downs in the stock market.