When we save some part of our hard-earned money, the first question that arises in our mind is where to invest this money so that we can get good profits in future. Suppose, you have a savings of Rs 1 lakh and you want to invest it somewhere safe or profitable for the next 10 years. There are many investment options available in the market today, ranging from traditional bank fixed deposits (FD) to post office schemes and stock market linked mutual funds. But, it is difficult for an investor to decide which is the best option for him. Let us understand through direct calculation that if you invest Rs 1 lakh for 10 years, then which among FD, Post Office and Mutual Fund will increase your amount the most.
How much profit will you get on bank FD and traditional investment?
Even today, bank FD is considered the safest and most reliable for investment in the country. For example, if we look at the interest rates of the country’s largest bank, State Bank of India (SBI), FD with a tenure of 10 years is currently giving an annual return of 6.5 percent. In this scheme, the benefit of compounding is added on annual basis. In such a situation, if you deposit Rs 1 lakh in SBI today, then on maturity after 10 years at the rate of 6.5 percent, you will get a total of Rs 1,87,714. That means, during this entire period you will earn a net interest of Rs 87,714.
Money will be doubled directly in this scheme of post office
If you want slightly higher returns than banks but do not want to take any risk, then post office schemes are a great option. In this case, ‘Kisan Vikas Patra’ (KVP) scheme is quite popular. In this government scheme, interest of 7.5 percent is being given with compounding on annual basis. By investing in this, your money doubles directly after a certain time. As per the current rules, the maturity period of this scheme is 115 months (i.e. 9 years and 7 months). If you invest your Rs 1 lakh here, then after completion of 115 months, you will get the full amount of Rs 2 lakh instead of Rs 1 lakh.
Risk in mutual funds, but returns are highest
Now let’s talk about that option where there is a possibility of getting much higher returns than traditional schemes. If you are willing to take some risk of market fluctuations, then mutual funds are for you. In long-term investments, mutual funds usually give an average annual return of up to 12 percent. If calculated on the basis of this estimated return of 12 percent, your Rs 1 lakh can grow to Rs 3,10,585 after 10 years. This means that you can get a huge profit of Rs 2,10,585 in the form of returns alone. However, it is important to note that this return depends on market movements and may increase or decrease.
Which is the best option for you?
Where should you invest your money among these three options? The answer completely depends on your risk appetite and investment needs. If you want to earn more profits and can take risk for a long time, then mutual fund is the best option for you. At the same time, if you do not want any kind of risk on your money and expect better returns, then you should choose Kisan Vikas Patra from the post office. However, in this you will have to leave your money for a long period. On the contrary, if you want your money to be safe and not have a very long term commitment, then choosing a bank FD would be a wiser move for you.