Nowadays, due to rising inflation, every person is looking for investment options to strengthen his financial position. But investing in the right place is not easy. The government offers many schemes to the people for savings and investment, out of which Public Provident Fund (PPF) and Systematic Investment Plan (SIP) are two of the best options. Both of these are not only safe but also give better returns in the long run.
SBI PPF: Great option for safe investment
If you want your money to be safe and give good interest, then opening a Public Provident Fund (PPF) account in State Bank of India (SBI) can be a great decision. This scheme is run by the government, so there is no risk of any kind in it.
Features of SBI PPF:
Government guarantee: This scheme is completely backed by the government, which keeps your money safe.
Long term savings: It has a minimum lock-in period of 15 years, which can be extended by 5-5 years.
High interest rate: Currently, PPF is offering an interest rate of up to 7.1%, which is revised from time to time.
Tax exemption: Investment in it is tax exempted under section 80C, along with the interest and maturity amount received are also tax free.
How to invest in SBI PPF?
PPF account can be opened through any nearest SBI branch or online net banking.
A minimum of ₹500 and a maximum of ₹1.5 lakh per year can be invested in it.
You can invest on a monthly, quarterly or annual basis.
Systematic Investment Plan (SIP): High returns with low risk
If you want to invest in the stock market but want to avoid risk, then Systematic Investment Plan (SIP) is a great option for you. In this, your money is invested in mutual funds, which gives good profits in the long run.
Benefits of SIP:
Big fund from small investment: You can start SIP with ₹500 and gradually build a big fund.
Advantage of compounding: The longer the investment, the greater the benefit, because interest is earned on interest.
Reduced risk: The impact of sudden fall in the stock market is less because regular investment is made in SIP.
Liquidity: Partial or full amount can be withdrawn if needed.
Possible return on 20 years of investment:
If you make a SIP of ₹1500 every month and continue investing for 20 years, the total investment will be ₹3,60,000. If the average annual return is 12%, then your fund can reach ₹14,98,722. That is, you will get only interest of ₹11,38,722!
Conclusion: Which is better – PPF or SIP?
If you want a fixed return with complete security, then PPF is right. On the other hand, if you want higher returns and can take some risk, then SIP is better.
Tip: You can make a balance by investing in both, so that your money will be safe and you will also get more profit in the long term.
Your money is the key to your future, so make the right decision and start investing in time!
