Nov 122015

Difference Between PPFs And Mutual Funds: A Quick Overview

Knowing the difference between PPFs and mutual funds can actually save you a lot of money to your pocket. A recent study showed startling results about effectiveness of PPF over mutual funds. But before you make the final call, you should understand the major differences between two.

Effectiveness of PPF

PPF is an acronym for Public Provident Fund. Anybody whether employed or unemployed can make the most of this government fund scheme. You can save a lot of money by submitting from RS 500 to RS 70,000 in your deposit account. Simply go to the head post office or visit the specified post office branch to open your deposit account easily. The return amount is 8% per annum. To get a big saving money share, you will need to wait for 15 years. In case you want to extend this time period, you can extend it for next 5 more years and increase the percentage profit significantly. The best part is if you complete the tenure, you do not need to pay any tax.

Effectiveness of mutual funds

Mutual funds are investment plans carried out by various investors. The best examples of mutual plan include bonds, stocks, money market tools and other similar instruments and assets. Having small capital amount and less market experience can lead to investment in mutual funds –a wise decision. Because you invest in a mutual fund you get to learn market trends, access to advanced portfolios of bonds, equities and other instruments. One big disadvantage of this fund is all the investors share profit and loss. If you want to buy a share, you would need to see its net asset value per share, commonly known as NAVPS.


If you do not know the market or you do not have a high risk tolerance, you should always go for PPF. PPF is much securer and safer for the people who want to keep their investment safe. In case you can bear any type of consequences and have high risk tolerance, you can invest in mutual funds.

PPF is the best investment plan for employees. If you have 15 or more years left in retirement, you can save a lot of money by investing in PPF. But if you are young and can invest in risky business, mutual fund is the best option for you.

The people who are unemployed or self employed should open a PPF deposit account. This way they will be able to save some money in a long run. You can keep investing more in your deposit account. In case you are not earning much and cannot deposit a specified amount in your deposit account every year, you will still be accumulating interest and can stay invested. The maturity time in PPF is very long –15 years. Therefore, an individual investing in PPF will need to wait for 15 years to get the amount back. Whatever tax saving plan you choose, always consult a financial planner before opting to any of them.

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