Deciding where to invest Rs 1 lakh for five years? The debate rages between ultra-safe NSC, dependable FD, and dynamic lumpsum mutual funds. Each offers distinct risk-return profiles—let’s dissect with precise calculations.
NSC is the fortress of investments. Government-guaranteed 7.7% compounding over five years, plus 80C tax savings. Rs 1 lakh yields Rs 1.44 lakh at end—flawless for those avoiding any uncertainty.
FDs provide solid ground. 7.5% from post offices surpasses bank rates of 6-6.5%, but interest faces tax. Rs 1 lakh grows to Rs 1.45 lakh, with better liquidity than NSC, though inflation remains a silent foe.
For bold investors, equity mutual fund lumpsum promises 12% average returns. Rs 1 lakh surges to Rs 1.76 lakh, powered by market growth but exposed to fluctuations. Highest potential, highest variability.
Experts recommend: NSC if safety is paramount, FD for balanced access, mutual funds if growth trumps all. Consider taxes, inflation, and your horizon. Invest not by hype, but by aligning with your financial destiny for optimal outcomes.