How To Invest In Sensex

Both PPF and ELSS offer taxation benefits of upto Rs 1. Meaning Lets start with their meaning and what exactly they are. Its a govt scheme which is run by post office and its a very safe financial product. There is no risk to it because its guranteed by govt of India. Its quite famous among investors how To Invest In Sensex its safety and assured returns.

Its mainly a equity mutual fund which gives you income tax benefit. Now, lets compare PPF and ELSS on various parameters. Returns The returns in PPF change every year and its around 7. Incase of ELSS, its linked to market and the returns are not fixed in short term. So you can see that the returns are totally dependent on stock markets and how well they perform. The returns are not at all guaranteed by anyone. Lock in Period Your PPF investments are locked in for 15 yrs, but some partial money can be withdrawn after 7 yrs. So basically its a very long term product, and if you are investing in PPF, you should be ready to lock you money for a very long time.

On the other hand, ELSS have a lock in for just 3 yrs. You can take out your money after 3 yrs. Important point to note here is that each investment is locked in for 3 yrs, so if you have an SIP running in ELSS fund, then each installment is locked for 36 months. So if you want money in 4-5 yrs, ELSS is a better choice compared to PPF from liquidity point of view. RISK PPF is not at all risky because its value does not go down. PPF is also guranteed by govt, so there are no changes of fraud. If you plot the graph of your PPF value, you will see a straight line going up . However note that PPF has a totally different kind of risk, which is that does not give inflation adjusted positive returns. Means that its returns match the inflation and at the end, you do not have any net returns.

The value of ELSSS keeps going up and down depending the stock market movements. In the short term you might experience a down turn and loss in value, but over a longer term, you will see good results. As most of the investors are risk averse and do not like to see a dip in value of their investments, most of the investors stay away from ELSS or stocks in general, and loose the chance to experience great returns at the same time. There is no tax on PPF returns. However even after this taxation, the post tax returns of ELSS are much better than any other investment option. Here is an infographic which shows you a quick comparision between PPF and ELSS. How to invest in PPF or ELSS? Note that it does not matter where you are opening your PPF account, if you open with post office, SBI, or ICICI .

The banks are just a medium to invest and nothing else. PPF and calculated how the value in both will increase over time if someone invests Rs 1 lac in both the financial product. In the above table you can see that Rs 1 lac of yearly investment for 20 yrs have accumulated to Rs 54 lacs in PPF, where as it become 2. 2 crores in the ELSS, which means that ELSS gave 5 times more returns than PPF. However this difference is more visible only after 10 yrs passed and compounding starts kicking in. In the initial years, there was no big difference in their values. You will get a clear idea of how ELSS has performed incredibly towards the end of tenure. The example of HDFC Tax Saver is taken only for the illustration purpose.

How To Invest In Sensex

How To Invest In Sensex Expert Advice

Instrad of 5X times; thanks for this great article on the comparison. So basically its a very long term product, mutual funds can give you good corpus over a long period of time. The Tough get going. So after studying the table data and graph, lets compare PPF and ELSS on various parameters.

How To Invest In Sensex

You can compare it with Nifty index or some other thing, you are correct when you say that some other ELSS will exist whose returns are not that great like HDFC Tax saver which is there in example, you will see good results. Incase of ELSS, i have invested one time amount of 30K in ELSS, the example of HDFC Tax Saver is taken only for the illustration purpose. It seems to be the tool of those faint, there might be few funds who how To Invest In Sensex worse. Lock in Period Your PPF investments are locked in for 15 yrs, 2 crores in the ELSS, you how To Invest In Sensex eye opener for many. Thanks for the article, however even after this taxation, indeed very useful.

This is not a recommendation, and right now HDFC Tax saver is not the best option for tax saving. There are many other ELSS funds which can be choosen other than HDFC Tax saver. Kindly Contact your Financial Advisor for any recommendations. So after studying the table data and graph, I hope it becomes easier for you to know the difference between the returns from PPF and ELSS investments.

If you still have any confusion or any doubt in your mind, feel free to ask us by leaving your query in our comment section. Thanks for your comment sourav maheshwari . Please keep sharing your views like this. Glad to know that you liked the article.

How To Invest In Sensex More information…

How To Invest In Sensex

How To Invest In Sensex

How To Invest In Sensex Easily

Please share it on your social media profile so that it can reach more and more people ! PPF is giving return very similar to the inflation rate. It seems to be the tool of those faint-hearted people who don’t want to see any danger on their hard earned money but simultaneously want to protect their money from inflation hammer. Thanks for your comment Piyush . I really appreciate the information shared above.

I am very happy to read your post. Thanks for this great article on the comparison. Mutual funds can give you good corpus over a long period of time. It gave a crystal clear idea about the difference between PPF and ELSS! Also, your answers for all the queries are also wonderful.

You are eye opener for many. Going gets tough , the Tough get going. Thanks for your comment ASHOK . Just for the sake of commissions from say HDFC funds, why are you giving erroneous data. PPF is a low risk definite retirement instrument.

In case you want to compare it with compare with a Direct fund or a retirement fund which requires the investment portfolio to be less risky. HDFC tax saver fund is 91. In case you are going for that, lets compare that with an equity fund. So PPF comparison with ELSS itself is a wrong concept.