PPF vs Mutual Funds:
Investors have been using both PPF and Mutual Funds to achieve their long-term financial goals. They are both long term investment instruments. But apart from that basic similarity, they differ on various other facets and serve investors with varied goals. Let us take a look at what suits you best in the long term.
Public Provident Fund
PPF stands for Public Provident Fund. It is a tax exempted savings instrument that lets people save a portion of their annual income for the future.
Investors of Public Provident Fund can earn interest income on their principal which is not taxable.
Public Provident Fund is a saving instrument for risk averse people and is backed by the government.
Some benefits of the Public Provident Fund scheme are:-
- Secured by government
- Tax benefits under section 80C
- Deposits can start from Rs 500
- Fixed interest income
Mutual funds are financial instruments in which investors chip in their money and it is managed by professionals. The money collected from all the investors is invested collectively.
Some benefits of Mutual Fund are
- Higher returns
- Managed by Professionals
- Option of both Lump sum and SIPs
- Investors can start from small amounts as well
Dilshad Billimoria, Board Member of the Association of Registered Investment Advisors (ARIA), told Business Today that investment decisions should be made keeping in mind the risk appetite and the financial goals of the investors. He said, “Investing decisions should be based on risk profile of an individual, goals and time horizon of the investment.”
He further explained that, “Both Public Provident Fund and Mutual fund are a great option from the asset allocation point of view because Public Provident Fund caters to Fixed Income and Mutual funds have equity debt, gold, and multi asset options.”
He concluded by saying, “The decision to invest in a particular asset class should be after considering the above parameters.”
Source: Business Today
Post by: mbahugunaandco.com
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