New Delhi: People in India are exploring various avenues to earn money. While some are generating returns by investing in mutual funds, others are building substantial wealth by investing in post office schemes. Ultimately, the goal for everyone is to earn money. If you are looking to invest, understanding a few key points can help completely eliminate any confusion you may have.
Below, we outline what happens if you invest ₹1 lakh for a period of 10 years—specifically, which option among Fixed Deposits (FDs), Mutual Funds, or Post Office schemes offers the highest returns. This information aims to prevent any potential difficulties or doubts. You can find all the essential details related to this topic, along with detailed calculations, in the article below.
Find Out How Much Return You Can Expect from an FD
For our FD calculations, we utilised the SBI calculator and applied SBI’s current interest rates. Currently, SBI offers a return of 6.5% on a 10-year Fixed Deposit. This investment also provides the benefit of annual compounding.
The calculations have been performed based on these parameters. If you invest ₹1 lakh for 10 years, you stand to receive a substantial benefit upon maturity, calculated at an interest rate of 6.5%. According to the calculations, the maturity amount would be ₹1,87,714. This means you would earn a profit of ₹87,714 solely in the form of returns.
Find Out How Much You Will Receive from the Post Office
On the other hand, if you opt to invest in the Post Office’s *Kisan Vikas Patra* (KVP) scheme, the interest compounds annually. This scheme offers a return of 7.5%. Furthermore, anyone is eligible to apply for this scheme. The maturity period for this scheme is 9 years and 7 months (or 115 months). If you remain invested in this scheme for the full 115 months, you will receive double your invested amount upon maturity. After 115 months, instead of the initial ₹1 lakh, you will receive ₹2 lakh upon maturity.
Returns on Mutual Funds
If you invest ₹1 lakh in mutual funds for a period of 10 years, you could receive ₹3,10,585, assuming a return rate of 12%. However, these returns may vary—they could be higher or lower. From the returns alone, you could potentially earn ₹2,10,585.
Which Option is Best for You?
In this scenario, if you are willing to take on some risk, mutual funds would be the best option for you. Mutual funds yield benefits primarily when you invest in them for the long term.
However, if you prefer to avoid risk, you should opt for the Post Office’s Kisan Vikas Patra scheme. This scheme is completely secure and offers higher returns compared to Fixed Deposits (FDs). Nevertheless, you will be required to keep your money invested in this scheme for a long duration.