PORD vs SIP: If small savings are made a habit of regular investment, then good returns can be achieved in the coming years.
PORD vs SIP: If small savings are made a habit of regular investment, then a good fund can be made in the coming years. A major factor before investing is the risk appetite of the investor. Post Office Recurring Deposit (Post Office RD) is a better option if you want to make regular investments without taking on market risk.
On the other hand, if you can take direct or indirect exposure to the market, then Systematic Investment Plan (SIP) can be a good option for investment. In both these options, you can start investing with a minimum of Rs.100.
Post Office RD: Rs 100 Monthly Investment, How Much Wealth Gain in 5 Years
One can start investing in Post Office Recurring Deposit (PORD) from 100 months monthly. There is no maximum limit for investment in this. At present, 5.8 percent annual interest is being given on RD of the post office. In this, the interest is compounded on a quarterly basis.
Suppose, you are investing Rs 100 every month in RD of post office, then after five years you will get Rs 6970 on maturity. In this, your total investment will be Rs 6,000 and you will get income from interest of Rs 970. Similarly, if you deposit Rs 1000 monthly, then in 5 years you will get Rs 69,697. In this, there will be 60 thousand investment and a wealth gain of Rs 9,697. Your money is completely safe in the post office scheme. There is no risk involved in this investment.
SIP: Rs 100 monthly investment, how much return in 5 years
If you have the ability to take market risk, then you can choose the option of investing in mutual funds. One can start investing in mutual fund schemes with a SIP of Rs 100. Most of the schemes have given an average return of 12 per cent per annum over the long term. At the same time, the returns of many schemes have been 30 percent or more in 5 years.
Suppose, you can start a monthly SIP of Rs 100 in mutual funds. The average annual return is 12 percent, so after 5 years you can get Rs 8249. In this, your investment will be Rs 6,000 and wealth gain of Rs 2,249. Similarly, if the return is 30 per cent, you will get Rs 13,939. Investment in this will remain only Rs 6,000, but the wealth gain will be Rs 7,939. Several mutual fund schemes such as Tata Digital India, ICICI Pru Technology, ABSL Digital India have had an average 5-year average return of 30 per cent per annum.
(Disclaimer: Returns here are calculated on the basis of a calculation. This is not an investment advice. Before investing, do your own research or consult your advisor.)
