Investment Tips: Should I invest money in NSC or make a lump sum investment in mutual funds? Know here...
NSC vs Mutual Funds Lumpsum: If you want to invest a lump sum amount, then apart from banks, many types of deposit schemes are run by the Government of India. National Savings Certificate of Post Office is also one of them. In this scheme, money is deposited for 5 years, on which interest is being given at the rate of 7.7 percent. This scheme is also included in the portfolio of the country's Prime Minister Narendra Modi. Another way of investment is Mutual Funds. You can deposit a lump sum amount in it and take advantage of a good interest rate.
However, interest cannot be guaranteed in Mutual Funds like NSC or any other government scheme because this scheme is market-linked. However, experts believe that it will give an average return of 12 percent. This return can be less or more. Experts advise investors to be prepared for risk before investing money in any market-linked product. If you are also thinking of investing a lump sum amount, then know here how much benefit you will get if you invest Rs 1 lakh in NSC or Lumpsum.
How much benefit is NSC?
National Savings Certificate i.e. NSC is currently giving interest at the rate of 7.7 percent. If you invest Rs 1 lakh in this scheme, then at the rate of 7.7 percent, you will get Rs 44,903 as interest on it for 5 years. In this way, you will get Rs 1,44,903 on maturity. You will get the interest rate for 5 years as per the date on which you buy the NSC certificate. Meanwhile, if the government increases or reduces the interest rates, it does not affect your NSC account.
How much benefit is lumpsum?
If you invest Rs 1 lakh in mutual funds through lumpsum, then at an estimated return of 12 percent, you will get Rs 76,234 as interest. In this way, you will get a total of Rs 1,76,234 in 5 years, which is much better than NSC. If this return is less than 12 percent, then at a 10% interest rate, you will get Rs 1,61,051 in 5 years, at a 9% interest rate, you will get Rs 1,53,862 and at 8% interest, you will get Rs 1,46,933. On the other hand, if you get a return of more than 12 percent i.e. about 15%, then the amount will more than double in 5 years. In such a situation, you will get Rs 2,01,136 at the rate of 15 percent interest. In this way, you are expected to get more profit in a lump sum.
Also, understand this thing related to Mutual Funds Lumpsum
The advantage of investing lump sum money in Mutual Funds through lump sum is that you can invest by looking at the market situation and taking advantage of its fluctuations. In Lumpsum, you do not need to invest on a fixed date every month like SIP, whenever you have lump sum money, you can invest it in mutual funds.
However, financial experts believe that money should be invested in lump sum only when you have a large capital and you have a good understanding of the market. A small mistake in this can also cause you loss. If you are a new investor and you want to get good returns by taking less risk in the market, then SIP can be the best option.
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