Right now, apart from jobs, most of the people wanted to invest in something for a better return. Meanwhile, many people are confused when thinking about whether it is better to invest in PPF or SIP. But today’s article will remove all your confusion. SIP or PPF, which is better for investment, will be discussed. PPF matures after 15 years.
A maximum of Rs 1.5 lakh can be
invested in PPF in a financial year. At the same time, how much amount can you invest in SIP, and you can continue to invest in it for any number of years? The biggest difference between these two schemes is that PPF is a government scheme that gives guaranteed returns, while SIP is a market-linked scheme, so its interest is also market-based. Know here that if you deposit 1.5 lakh rupees annually in PPF for 15 consecutive years and invest the same amount in SIP, then how much profit will you get?
How much will you invest in 15 years?
Whether it is PPF or SIP, if you invest Rs 1.5 lakh annually, then you will invest Rs 12,500 every month. In this way, you will invest a total of Rs 22,50,000 in 15 years. Since PPF is a scheme with guaranteed returns and SIP is a market-linked scheme, the interest of both is also different. You get interest at the rate of 7.1 percent on PPF, while the average return of SIP in the long term is considered to be 12 percent.
How much will be the maturity amount on PPF?
If you invest in PPF at the rate of Rs 1.5 lakh per annum for 15 years continuously, you will get a total of Rs 40,68,209 as maturity amount at 7.1% interest. You will invest Rs 22,50,000 in it, and you will earn Rs 18,18,209 from interest.
How much return on SIP
According to a 12% return on investing in SIP for 15 years at the rate of Rs 1.5 lakh per annum, you will get Rs 63,07,200 as the maturity amount after 15 years. You will invest Rs 22,50,000 in it, and you will get Rs 40,57,200 as interest.
What if you want to invest in PPF for more than 15 years?
If you want to invest in PPF for more than 15 years, you can do that too. In this scheme, you get the option of extension. However, the extension is in a block of 5–5 years. For this, before the completion of 1 year from the date of maturity, you have to submit an application at the place where your post office account is open. After this, you have to fill out and submit a form for extension.
Understand this thing about SIP
SIP is a market-linked scheme, so returns cannot be guaranteed in it. In the long term, 12% returns are reported on the basis of an estimate. It may be more or less depending on the market situation. However, despite these risks, SIP is considered very good in terms of wealth creation because it has the benefit of rupee cost averaging, so the loss is covered to a great extent. Still, if you are investing in it, then invest only keeping in mind the risk of SIP.
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