look news india
SIP vs PPF: Public Provident Fund and Mutual Fund are two different schemes. Both have their own advantages and disadvantages. PPF is a government guaranteed scheme which matures in 15 years. If you want to run it for a long period, you can extend it many times in blocks of 5-5 years. PPF currently gives 7.1 percent interest and being in the EEE category, this scheme gives you tax benefits in three ways. In this you get the benefit of compounding, so it is a good option to earn a big amount through safe investment. A maximum of Rs 1.5 lakh can be invested in this scheme.
Talking about mutual funds, in this scheme you can invest a fixed amount every month through SIP. You can invest in it for any period of time. You can stop or close it whenever you want. You can increase or decrease the investment amount according to the increase or decrease in income. This scheme is market linked, so you cannot be guaranteed returns in it. But experts say that this scheme will give a return of 12 percent in the long term. If you get more than 12 percent then it is even better. But you will not get tax benefit in this scheme. In the long term, this scheme can create wealth rapidly because you also get the benefit of compounding in it. Here you have understood the disadvantages and advantages of both the schemes, but now the question is, which scheme can create wealth faster and make you a millionaire? Here is the calculation of monthly investment of Rs 10,000-
In how many years will you become a millionaire through PPF?
If you invest Rs 10,000 every month in PPF, then you will invest Rs 1,20,000 annually. To become a millionaire, you have to continue this investment for at least 28 years. In 28 years, you will invest Rs 33,60,000, on which you will get Rs 71,84,142 as interest and you will become the owner of a total of Rs 1,05,44,142. On the other hand, if you extend it for two more years i.e. continue investing for a full 30 years, then you will invest a total of Rs 36,00,000 in 30 years, you will get Rs 87,60,728 as interest and you will get Rs 1,23,60,728 as maturity amount. But to continue for 30 years, you will have to extend the PPF 3 times in blocks of 5-5 years.
When will a monthly investment of Rs 10,000 in SIP make you a crorepati?
If you invest Rs 10,000 in SIP, you will have to invest for at least 20 years. In 20 years, you will invest a total of Rs 24,00,000 and if calculated according to 12 percent return, you will get Rs 75,91,479 as interest. In this way, after 20 years, you will get a total of Rs 99,91,479 which is about Rs 1 crore. On the other hand, if you continue this investment for just 1 more year, you will invest a total of Rs 25,20,000 and you will get Rs 88,66,742 as interest and after 21 years you will own a total of Rs 1,13,86,742.