FD, PPF or Mutual Fund? Where to Invest Your Money
Who doesn’t want to be a millionaire in today’s world? Surely most of us would like to be a millionaire. But how many of us actually put in the effort to become millionaires?
Maybe we sit and wish to become millionaires someday, to win the lottery or some other miracle like that.
But there is a way in which you can become a millionaire. This is the way to invest. Learn more about the specifics.
It’s Easy to Become a Millionaire by Investing
You have the option of making money through investment, which can make you a millionaire.
Disciplined investing can slowly propel you towards becoming a millionaire. A slow and steady race can get you victory.
Become a Millionaire With a Very Simple Option
Let us take three common investment options (PPF, bank FD, and mutual fund) available to investors. Comparing these will give you an idea of how long it will take to become a millionaire.
PPF
The Public Provident Fund (PPF) is one of the safest tax-saving investment options. The government’s sovereign guarantee remains in this scheme managed by the Government of India.
Contrary to popular belief, PPF interest rates do not remain constant throughout the tenure. The Finance Ministry reviews the interest rates of PPF and other small savings schemes every quarter.
Interest rates are primarily determined on the basis of government bond yields. At present, the government has kept the interest rate on the PPF at 7.1% per annum.
This is for the July-September 2022 quarter. The time in which you can become a millionaire also depends on how much you invest every month.
If PPF rates remain the same and you invest Rs 12000 every month, you will be able to create a corpus of Rs 98.95 lakh in 25 years. Now, if interest rates increase or you invest more, this work can be done quickly.
Bank FD
Bank FD is one of the most common and traditional investment instruments in our country. FDs in banks are insured up to Rs 5 lakh. Simply put, DICGC (Deposit Insurance and Credit Guarantee Corporation), which is a subsidiary of the RBI, provides insurance coverage for this deposit.
As far as returns are concerned, currently, the interest rates at various banks range between 3% and 7% per annum.
Talking about becoming a crorepati, if you make a one-time FD of Rs 27.60 lakh and you are offered an interest rate of 6.5%, then you will be able to create a fund of more than Rs 1 crore in 20 years. If you get more interest, you can become a millionaire quickly.
Mutual Fund
There is a rule in mutual funds called 15X15X15. Here, the number “15” has been used three times in this rule.
These include the growth rate, tenure, and monthly amount of savings. Assuming you get 15% annualised returns over 15 years (180 months), you would need to invest Rs 15,000 every month to reach a corpus of Rs 1 crore.
That means 15 years, Rs 15000 per month, and a 15% annual return will get you to millionaire status.
