2021-05-21 15:30:02
PPF is still one of the best options available to us. Why?
1) The amount you invest becomes non-taxable
2) The interest you earn in non-taxable
3) The maturity amount is non-taxable.
We see here that if we also take into picture the amount we would have paid as tax, the actual return of PPF is much higher than the said 7.1%.
Continuing
4) It is a guaranteed return investment
5) It locks-in the investor for a 15-year period, thus reducing the chances of an early withdrawal, which would have killed the chance of compounding
6) Not useful for all, but the amount you have in your PPF account cannot be attached by a court order
Most importantly,
7) As we have seen, the interest rate fluctuates. It can increase again tomorrow. And this is the rate of Compound Interest. The more money there is, the more it will compound. The interest rate was reduced during the lockdown, and might increase again.
I know people who are still waiting for the right environment to invest, and those who have followed this linear and easy path. We can imagine who feels good about their decision now, and who feels bad about it today.
Keep your investment journey simple, do not worry about fluctuations of a few percentage points when you are investing in strong investment avenues. The time period will take care of these minor downfalls.
Trying to time the stock market, frequently thinking about the highest return investment, or taking breaks have never helped anyone.
Always invest to attain your goals, not to gain a return .1% higher than xyz.
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