PPF vs. Post Office RD: Nowadays, many people plan for savings alongside their earnings. Those who have savings can use these funds in emergencies. If you are not saving, you might face significant difficulties in the future—but there is no need to worry. The government offers specific savings schemes that allow you to invest a portion of your salary—such as ₹5,000 or ₹10,000—to secure your future and build a substantial corpus.
By saving ₹10,000 from your monthly salary, you can accumulate a significant fund for the future. The key is choosing the right investment scheme. In this article, we will explore some excellent investment options.
Where should you invest?
We are referring to the Post Office Recurring Deposit (RD) scheme and the Public Provident Fund (PPF) scheme. By investing regularly in these schemes, you can build a substantial fund. For instance, if you save ₹10,000 per month and invest it consistently, you can accumulate a significant amount over time.
How much can you accumulate in a PPF?
The PPF is an ideal choice for those looking to invest for the long term. It offers an interest rate of 7.1% per annum. The scheme has a maturity period of 15 years. If you invest ₹10,000 monthly, you would contribute a total of ₹18 lakh over 15 years. With an interest rate of 7.1% applied over these 15 years, you would receive a maturity corpus of approximately ₹32.5 lakh. This will yield an interest amount of ₹14.5 lakh, which you can use to meet future needs.
Investing in the Post Office RD Scheme
Investing in the Post Office Recurring Deposit (RD) scheme can prove to be beneficial. Investors earn interest at a rate of 6.7% per annum, compounded quarterly. If you extend the tenure to 5 years and deposit ₹10,000 every month, you will have deposited a total of ₹6 lakh over those 5 years. Similarly, over 10 years, you could contribute a total of ₹12 lakh. It is worth noting that the total corpus accumulated will depend on the applicable interest rate.