PPF Vs SIP: Guarantee or Risk? Which scheme will make you a millionaire soon with a monthly investment of ₹10,000, understand the calculation
PPF and SIP are two different schemes. Both have their advantages and disadvantages. Know their advantages and disadvantages here, as well as understand which scheme can create wealth faster and make you a millionaire.
Public Provident Fund and Mutual Fund are two different schemes. Both have their advantages and disadvantages. PPF is a government-guaranteed scheme which matures after 15 years. If you want to run it for a longer period, you can extend it several times in blocks of 5 years each. PPF currently gives an interest of 7.1 percent and being in the EEE category, this scheme gives you tax benefits in three ways. In this, you get the benefit of compounding, so this is a good option to make big money 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 length of time. You can stop or stop 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. However, experts say that this scheme will give a return of 12 percent in the long term. If you get more than 12 percent, it is even better. But you will not get tax benefits 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 advantages and disadvantages of both the schemes, but now the question is which scheme can create wealth faster and make you a crorepati? Here is the calculation on a monthly investment of Rs 10,000-
In how many years will you become a crorepati through PPF?
If you invest Rs 10,000 every month in PPF, then you will invest Rs 1,20,000 annually. To become a crorepati, you will have to continue this investment for at least 28 years. In 28 years, you will have invested 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. If you extend it for two more years, that is, continue investing for the entire 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 PPF 3 times in blocks of 5 years each.
How long will a monthly investment of Rs 10,000 in SIP make you a millionaire?
If you invest Rs 10,000 in SIP, then 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 a 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 almost 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, you will get Rs 88,66,742 as interest and after 21 years you will own a total of Rs 1,13,86,742.
