Crorepati Calculator: Both Public Provident Fund (PPF) and mutual funds are very popular options for long term investing. Whether planning for own retirement, financial planning for the future of children or saving to buy a house, both these options can prove to be better. However, before deciding to invest, it must be seen where there can be much profit in future. In this, it is also important for the investor to take his risk and time horizon. Now, if you save in a smart way, then it becomes easier to meet the goals set in your life. If you have a target of raising funds of 1 crore rupees after a fixed time, then which option will be better in your PPF and mutual funds.
PPF Vs Mutual Fund
There are many investors in the market who are not ready to take any risk on their money. PPF is a better option for them. Because being a government scheme, there is protection on your money here. But here the return is decided beforehand. You will not get returns more than the fixed interest till the maturity of the plan. For example, the annual interest on PPF is currently 7.1 per cent. If these rates continue further, your money will increase based on this rate only.
On the other hand, the returns of equity mutual funds are linked to the market. So the risk here is more than PPF. But if there is a long-term goal, then the market risk gets covered. Most of the mutual funds which have invested more than 10 years are performing very well. The biggest advantage of mutual funds is that returns can also be strong when the market rallies. For example, in a period of 10 years to 15 years, it can give a rate of 12 to 15 percent per annum.
EPF, VPF, PPF, NPS: If you want to create a big retirement fund, then invest in these schemes, know what are the benefits
Maturity period in PPF is 15 years. But it can be extended for another 5–5 years. At the same time, you can continue to invest in mutual funds for as many years as you want. However, ELSS and debt fund schemes have a maturity period.
Where will you become a millionaire soon
Monthly maximum amount of Rs 12500 can be deposited in PPF which is 1.5 lakhs per annum. We have done calculations in PPF and mutual funds on this basis. The annual interest on PPF is still 7.1 per cent, while talking about mutual funds, in the last 15 years, there are many schemes in which the average return of SIP has been 12 to 15 per cent per annum. Here we have kept an average return of 10% per annum in mutual funds.
Public Provident Fund (PPF)
Maximum Monthly Deposit: Rs 12,500
Maximum Annual Deposit: Rs 1,50,000
New Interest Rates: 7.1% Compounding Yearly
Amount on Maturity after 25 Years: Rs 1.03 Crore
Total Investment: 37,50,000
Interest benefit in 25 years: 65.58 lakh rupees
Equity Linked Saving Scheme (ELSS)
Maximum Monthly SIP: Rs 12,500
Maximum Annual Deposit: Rs 1,50,000
Estimated Interest Rates: 10% Compounding annually
After 21 years Amount on Maturity: Rs 1.07 Crore
Total Investment: 31,50,000
Interest benefit in 21 years: Rs 69 lakhs
Comparison with other options
Investment Interest Maturity Risk Profile
NSC 6.8% 5 Year Low Risk
NPS 6-8% Market Related to Retirement
ELSS 7-9% Minimum 3 Year Market Related
FD 5.4-6.5% 5 years Low Risk
