Equity Shares V/S PPF V/S Fixed Deposit

Equity Shares V/S PPF V/S Fixed Deposit

For an investor looking for investment sources in the market, there are many options to choose from. The market is now gaining its position back, and this might be the right time to invest in one of the different sources in the market. There are different sources in the market like Equity Shares V/S PPF V/S Fixed Deposit that have different benefits. It is important that you choose the investment source that suits you the best.

Equity shares are one of the most popular forms of investment in the market; known for their returns as they are widely recommended by the investors. Equity shares are a part of Mutual funds that have maximum investment risk but can sometimes guarantee high returns. PPFs are government curated savings scheme in which the investor gains profit after a certain period of time. PPFs are also known as tax-free income options. Similar to PPFs are Fixed deposits, FDs are one of the popular forms of investment sources in India. They are known for the investment safety and guaranteed returns.

Investments can help you gain benefits in the future and can also improve your financial condition, but while investing it is necessary that you check the following points:

Minimum Investment amount: While investing it is important that you invest according to your financial conditions. There is no minimum investment amount prescribed by the Bombay Stock Exchange (BSE) or National Stock Exchange (NSE). The investment amount for the share depends upon the rate at which the companies are selling their shares in the market. In PPFs, the starting investment amount is INR 500, and the maximum investment you can deposit is INR 1.5 lakhs. For FDs, the minimum investment amount starts at INR 1,000 and can range up to INR 1.5 lakhs.

Period of investment: In fixed deposits, you can gain income as long as the term is going on, the minimum term of investment for FDs is 1 year, and the maximum term of investment is 5 years. The investor can gain benefits from fixed deposits till it reaches the maturity date. PPFs are long term investments; you can invest in PPF for minimum 7 years (which is a lock in period) till 15 years. On the other hand, Equity shares can be considered as a life time investment there are no minimum or maximum durations set for the investment maintenance.

Return calculation: The returns for FD’s are calculated on the basis of interest rates applied on the amount deposited with the help of online FD interest calculator. The interest amount is generated annually. If the investor chooses to invest in a non-cumulative interest, then the interest rate will be deposited according to the compound period selected. In Equity shares, the income is generated by the performance of the company in the stock market. If the company performs well, then the investor will get good returns, but if the company fails to perform well in the stock market, then the investor will incur losses too. For PPFs, the investor keeps depositing money in his PPF account and gains profit according to the interest applied to the deposit at the end of the tenure.

In accordance with the information mentioned above, it can be understood that these investments are totally dependent on the financial capacity of the investor. If the investor wants a risk free and guaranteed income, he can opt for an FD or a PPF investment. But, if the investor has a wide experience of the market and proper knowledge of investments he can invest in Equity shares.

Additional Read:

A Beginner’s Guide to Wise Investment Options

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