PPF, SIP, SSY and Post Office RD: How much fund will be created if you invest ₹1,000 every month?
Most people believe that investing always involves investing large sums. However, even if you start with a small amount, you can easily build a substantial corpus. Here's how much you can build from this small amount if you save ₹1,000 every month and invest it in schemes like PPF, SIP, SSY, and Post Office RD.
PPF – A Government-Guaranteed Option
The Public Provident Fund (PPF) currently earns an interest rate of approximately 7.1% per annum. If you invest ₹1,000 every month, you will accumulate approximately ₹1,80,000 in 15 years, earning an interest of ₹1,45,457. This means a total of ₹3,25,457.
SIP – The Power of Mutual Funds
If you invest the same amount every month through a SIP in an equity mutual fund and earn a 12% return, you will have invested approximately ₹1,80,000 in 15 years. However, at 12% interest, you will earn ₹2,95,931 in interest. This means you will earn a total of ₹4,75,931.
Sukanya Samriddhi Yojana – Special for Daughters
The Sukanya Samriddhi Yojana (SSY) currently offers an annual interest rate of approximately 8.2%. The investment period is 15 years, and the scheme matures at 21. By investing ₹1,000 every month, the total investment will be ₹1,80,000. The interest earned on this will be ₹3,74,206, creating a total fund of ₹5,54,206. Sukanya Samriddhi Scheme can only be opened in the name of a daughter and also offers tax benefits.
Post Office RD – Simple and Safe
Post Office RD is available for 5 years. This scheme offers an annual interest rate of approximately 6.7%. If you invest ₹1,000 every month, your total investment will be ₹60,000, and you will receive ₹11,369 in interest. This will give you a total of ₹71,369. If you wish, you can extend it for another 5 years. In this case, your total investment in 10 years will be ₹1,20,000. You will earn ₹50,857 in interest and will receive ₹1,70,857 at maturity.
Choice as per need
If you want zero risk, PPF or Post Office RD are better. But if you want growth and are willing to take a little risk, SIP can offer the most benefits. It also offers the opportunity to increase your corpus based on your income. In this case, you can increase your corpus and earn even more profits by investing in a top-up.
Can you withdraw funds from PPF after 5 years?
The total tenure of PPF is 15 years, but partial withdrawals are available after 5 years. However, SIP doesn't have the hassle of lock-in. You can also withdraw funds by closing it.
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