Investment Planning: Public Provident Fund vs Mutual Fund

Investment Planning: Public Provident Fund vs Mutual Fund

by 5paisa Research Team Last Updated: Dec 11, 2022 - 10:28 am 48.5k Views
Listen icon

Appropriate investment planning aids an individual to achieve their life goals and objectives.

In today’s world, investing has become a necessity, if you don’t plan your investments you might end in a financial crisis in future. In life ahead, any uncertainty might come and hit an individual’s life so in order to overcome such events smoothly one should adequately plan their insurance and investments.

Appropriate investment planning also aids an individual to achieve their life goals and objectives. There are lots of investment avenues available in the market in which individual can invest their capital. So many investment options can put an individual in a dilemma of where to invest.

Out of many investment avenues, we will look into the two major ones, such as Public Provident Fund and Mutual Fund. Public Provident Fund is a long-term investment tool whereas, Mutual Fund is a long-term, medium-term or short-term investment tool.

Let’s look at the difference between these two investment options:

Particulars  

Public Provident Fund  

Mutual Fund  

Investment type  

Public Provident Fund is a long term investment tool run by the government, which offers fixed and safe returns to their investors.  

Mutual funds are managed by fund managers, who offers their investor to reap maximum benefits by investing in instruments according to the mutual fund schemes  

Mode of investment  

Investors have to invest at least a minimum amount in order to keep account active.  

One can invest in mutual funds schemes through SIP or lumpsum.  

Minimum Investment Amount  

₹500  

₹100 or ₹500 (for SIP) vary according to mutual fund.  

Returns  

Returns are fixed and safe guaranteed by the government. The prevailing rate of the Public Provident Fund is 7.1% (FY 2021-2022)  

Returns of mutual funds are market-linked and are based on the performance of the mutual fund.  

Maximum Investment Amount  

₹1,50,000  

No upper limit  

Maturity Period  

15 years – you can extend the same by a block of 5 years  

There is no maturity period as such. Investors can hold for long-term or short-term as per their needs and risk exposure and investment horizon.    

Share Market Today


How do you rate this article?

Start Investing in 5 mins*

Rs. 20 Flat Per Order | 0% Brokerage

378X91-D3

About the Author

Our research team is composed of some highly qualified research professionals, their expertise range across sectors.


Enjoy 0%* Brokerage with 5paisa
Resend OTP
Please Enter OTP
Mobile No. belongs to

By proceeding, you agree to the T&C.

Latest News
Polymatech Electronics: ₹1,500 Crore IPO for Semiconductor Expansion

Polymatech Electronics, prominent semiconductor chip manufacturer based in Chennai, is gearing up for significant financial move with plans to launch₹1,500 cr initial public offering (IPO) by end of year. This IPO, double size initially envisaged, signifies company’s ambitious expansion strategy in semiconductor industry.

Vodafone Idea Sets Floor and Cap Prices for FPO Amid Market Speculation

In a major development, Vodafone Idea Ltd. has revealed the floor price and cap price, alongside the lot size, for its upcoming follow-on public offering (FPO). The telecom giant witnessed a decrease of more than 3.25% during early trading on Wednesday, settling at ₹12.51, thus holding a market capitalization exceeding ₹61,000 crore.

Bondada Engineering Share Price Surged by 1423.2%, Know Why?

Bondada Engineering, standout in integrated infrastructure sector, witnessed extraordinary surge in its share price, soaring by impressive 1423.2% since its debut on BSE SME platform in August 2023. Investors who were part of IPO allocation saw significant gains, potentially earning 18.3 lakhs in just over eight months.