Everyone knows how to earn money. But only a few know how to invest money the right way. If you save ₹5,000 every month, you can make lakhs of rupees. You have two options. You can invest in a Post Office Recurring Deposit (RD) or a Systematic Investment Plan (SIP). Both are good ways to invest. But the returns may be different after 5 years. Let us see how much money you can get and which option is better.
How Much Fund Will You Get by Investing in Post Office RD
Post Office RD is a safe way to invest. You get guaranteed returns. Right now, the interest rate is 6.7% per year, and it is calculated every three months. If you invest ₹5,000 every month in RD, your total investment in 5 years will be ₹3.5 lakh. With 6.7% interest, your total amount after 5 years will be ₹3,56,830. The best thing about RD is that there is no risk, and the return is guaranteed. It is good for people who want safe investment.
How Much Fund Will You Get by Investing in SIP
SIP is investing in mutual funds that are linked to the market. There is no guarantee of return, but it can give good profits over time. Experts say the average return of SIP is 12% per year. If you invest ₹5,000 every month in SIP, your total investment in 5 years will be ₹3 lakh. At 12% return, you will earn about ₹1,05,518 as profit. Your total amount will be ₹4,05,518. If the market does well, your profit can be more. But if the market goes down, the return can be less.
The main difference between RD and SIP is risk and return. RD is safe and guaranteed, while SIP has market risk but can give higher returns. For example, with 12% return, SIP gives about ₹48,688 more than RD. If you can take some risk and invest for 5 years, SIP may be better. If you want safe and fixed returns, RD is better.
Before investing in SIP, it is important to understand the mutual fund scheme and market situation. RD is easy and safe. Both can help you increase your savings.