PPF and Mutual Funds are legitimate financial assets. However, they are very different in terms of risk return perspective. tenure of investment and ease of investment.
Public Provident Fund (PPF): Government of India started PPF (Public Provident Fund) through the enactment of PPF Act, 1968. Key provisions of PPF are:
Some features worth considering:
Mutual Funds: Are a collection of stocks or bonds bought and managed by a fund manager on your behalf. The fund manager creates a portfolio of securities that is consistent with the objective of the fund. The equity mutual funds are primarily invested in equity-based instruments and debt mutual funds are invested in fixed income securities like government and corporate bonds, non-convertible debentures etc.
Types of Mutual Funds:
Hence, both PPF and Mutual Funds are totally different investment options. A PPF assures you of guaranteed returns, whereas mutual funds returns are subject to market risks and volatilities. Before committing to mutual fund investment or PPF investment, the investor should gauge his or her risk appetite, tenure and objective of investment and then decide.