PPF vs Mutual Fund: You will get strong returns with tax exemption on mutual fund investment, FD and PPF will keep on filling the water.
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PPF vs Mutual Fund: Proper planning is very important while investing anytime. You must have heard this complaint from many people that they should keep investing by planning their entire life. However, at times they were left empty handed or could not get even a handful of returns. In such a situation, many people are confused whether it is better to invest in PPF or it is better to do SIP in mutual funds. In such situation we can help you. PPF has always been a popular investment option due to its guaranteed returns and tax-free future value. But in many cases mutual funds are better. Recent data suggests that mutual funds may be a better option in the long run. However, for this you will need proper planning and the help of a financial advisor.
How is mutual fund better?
Investing in PPF is best for any common investor who does not want to take too much risk. However, when comparing PPF with mutual funds in four scenarios, mutual funds come out ahead even after deducting 10% long-term capital gains tax. While PPF has a limit of Rs 1.5 lakh per year, there is no such limit in mutual funds. There are many mutual fund investments in which the investor can be given exemption under Section 80C of Income Tax. Additionally, smart investors can continue to redeem and reinvest to avail the tax exemption of Rs 1 lakh every year offered by mutual fund investments. However, in the long run the volatility of investments does not matter, especially if the investment lasts for more than 10 years. Since PPF is a long-term investment it is advisable to consider other options to maximize returns. As always, it’s important to do your research and choose the investment option that works best for your financial goals.
what is ppf
Provident Fund (Provident Fund) i.e. PPF is a savings scheme designed for Indian public sector employees. This scheme provides a safe and secure way for employees to save for their post-retirement life. PPF is for those workers who work organically in an organization or company. Under the scheme, every month, a fixed amount is deposited into the PPF account by both the employee and the company. After this, the employee or his designated substitutes can receive this amount after retirement. In this, the interest rate on the deposited amount is determined by the government, due to which the deposited amount increases with time. The investor gets a huge amount at the time of retirement. Tax exemption is also provided by the government on the amount deposited in PPF.
what is mutual fund
A mutual fund is a financial scheme in which the money pooled by different investors is pooled into one group and made various investments by a professional investment manager. In this, a common investment portfolio is created for investors by gathering them, the profit of which is distributed among them. Mutual funds support a variety of investment options, such as stocks, bonds, and other assets, giving investors the benefit of diversification. It has good liquidity as investors can place a request for equity or debenture to the investment manager to withdraw their investment. In this, small investors can also participate in big investments, which gives them an opportunity to participate in the financial market. There is a minimum investment amount for investing in mutual funds, due to which even small investors can participate in it.
,Disclaimer: Please note that investing in mutual funds involves market risk. Consult an expert before investing,
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