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10/31/2019

Which Is Better Option For Investment - Real Estate, PPF Or Stock Market?

Are you struggling to make it big with your monthly income? In reality, the salary you earn goes in paying the bills and filling all the basic necessities. Whatever amount is left, you save it in your bank account. However, the hard-earned money is not enough to fulfil your dreams. The smart move would be to opt for investments.

In India, Real Estate, Stock Market, and Public Provident Fund are some of the popular investment options. They help you in achieving your goals faster and you can lead a life of your dreams. To help you understand which investment option would be ideal, read the following comparisons:

1. Real estate investment - The most common pattern of investment by the people in real estate is seen for vacant plots or housing properties. Willing to invest in a property strategically located and surrounded by excellent social infrastructure makes one's lifestyle exceptionally comfortable. On the other hand, the rental business helps generate more wealth from the property you have purchased. However, investment in real estate is big, with the cost of properties being quite high. A property in metro cities such as Delhi, Mumbai and Bengaluru cost at least INR 50 Lacs, offered in various payment plans.

With progressive government schemes, the most popular one being Smart Cities Mission launched in 2015, tier 2 cities seem equally attractive in terms of real estate investment. The mission has resulted in adequate water/electricity supply, better public transportation, affordable quality housing, improved health/education sector, security of the citizens, digitisation, and more. Lucknow, Chandigarh, and Jaipur are some of the Tier 2 cities developed under this scheme. Hence, the present time is right for you to invest as benefits and options in real estate have widened in the country.

2. Public Provident Fund investment - It involves a small amount with a long term investment option. Public Provident Fund ( PPF ) gives you an attractive rate of interest and return, which are not taxable under Income Tax.

To open a PPF account, you need to have an account in either a Post Office or a nationalised bank, namely SBI, Allahabad Bank, Bank of India, etc. Some private banks have the authority to provide the Public Provident Fund too. Submit the PPF application form along with the required documents, while some banks have started the facility online.

The interest rate usually goes up to 8% with a minimum tenure of 15 years. With just ₹ 100, a PPF account can be opened. You are allowed to invest a minimum amount of ₹ 500 and a maximum of ₹1.5 lacs for each financial year. Hence, the flexibility in amount to be deposited won’t make you feel burdened. The government backs the PPF form of investment. Hence, it is risk-free. Only an Indian citizen is authorised to invest in PPF, and strictly not for NRIs.

3. Stock market investment - While real estate requires a huge amount of investment, stocks in the stock market is easy to buy and sell. This type of investment has the potential for large and rapid gains. A growing economy means a boost in all the sectors. Hence, the value of your stocks simultaneously rises. 

You can make money in the stock market by either going with the short-term trends by redeeming your shares when you feel the time is right or wait longer to see the company's earnings and stock price rising more. For both, stock-picking skills will decide your money-making performance. 

The choice of investing in the stock market depends on your risk tolerance. There is a chance of losing a huge amount of investment. You are subjected to market risk, the country's economic performance, and fluctuations in the value of your stocks.

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