In this era of inflation, investing in the right place is the biggest question for everyone. The right choice of investment not only secures your future but also makes your money grow faster. When it comes to investing, the two most popular options in India are the Public Provident Fund (PPF) and the Mutual Fund.
Both these schemes are made for different types of investors. While a PPF promises safe investment with government guarantee, a mutual fund gives a chance of better returns with market risks. So, in this article, let us compare these two schemes and know which scheme is better for you.
Public Provident Fund (PPF)
Public Provident Fund is an investment option that is considered completely safe. In this, the Government of India itself guarantees the safety of your money. If you want to grow your money without any risk, then this scheme is perfect for you. You get fixed and guaranteed returns on the amount invested in PPF. Also, this scheme offers tax benefits under Section 80C of the Income Tax Act.
The lock-in period of this scheme is 15 years, which makes it an excellent option for the long term. You can invest a minimum of ₹ 500 and a maximum of ₹ 1.5 lakh annually in it. Currently, this scheme is offering an interest rate of 7.1%. If your priority is safety and stability, then PPF is a great option for you.
Mutual Fund
A mutual fund is an investment area that is directly linked to the stock market. In this, investors’ money is invested in shares, bonds, or other securities. In mutual funds, you get many options according to your risk appetite, such as low risk, medium risk, or high risk.
If the mutual fund performs well, you can get much higher returns than PPF. It has market-related risks, that is, market fluctuations can affect your investment. However, experts believe that mutual funds often give good returns in long-term investments. If you want to earn more profits by taking a little risk, then mutual funds may be better for you.
PPF vs Mutual Funds, Which is better
Both PPF and Mutual Funds are better in their own place. PPF is best for those who do not want to take risks and want a fixed return on their investment. It is also great for those who want to create a safe fund for their old age. On the other hand, mutual funds are for those investors who can take a little risk for higher returns. It is also a good option for those who want to grow their money fast in the long term.
Your choice depends on your personal financial situation, your goals, and your risk-taking ability. Both schemes can make your financial future better; you just have to make the right choice according to your needs.
