Want to invest Diwali bonus? Returns compared for ₹50,000, ₹80,000, ₹1 lakh in PPF, SIP or FD — Calculation here
As we firmly enter the festive season this year, government entities and private corporations are likely to announce Diwali bonus pay for employees. The Union Cabinet on 14 October approved productivity-linked bonus (PLB) of ₹2,009 crore worth 78 days’ wages for 11.4 lakh eligible non-gazetted railway employees.
For other salaried employees looking forward to receiving gifts and bonuses from their employers, the additional payout can help boost their savings, cover shopping expenses or add to their investment fund.
For those choosing to invest their Diwali bonus, we compare the returns you may get by allocating your money towards either the public provident fund (PPF), a systematic investment plan (SIP), or a bank / post fixed deposit (FD).
We break down the calculations for bonus of ₹20,000, 50,000, ₹80,000 and ₹1 lakh, as follows:
Investing Diwali bonus in SIP
Assuming lumpsum investment in an SIP for a period of five years, at 12% interest p.a. you will generate returns as follows:
Investing Diwali bonus in Bank FD
Assuming lumpsum investment in a bank fixed deposit for a period of three years, at 6.40% interest p.a. you will generate returns as follows:
Investing Diwali bonus in Post FD
Assuming lumpsum investment in a post office fixed deposit for a period of five years, at 7.50% interest p.a. you will generate returns as follows:
Investing Diwali bonus in PPF
Assuming lumpsum investment in PPF for a period of one year, at 7.1% interest p.a. you will generate returns as follows:
- ₹20,000 is expected to return ₹1,420 in interest, for a total value of ₹21,420.
- ₹50,000 is expected to return ₹3,550 in interest, for a total value of ₹53,550.
- ₹80,000 is expected to return ₹5,680 in interest, for a total value of ₹85,680.
- ₹1 lakh is expected to return ₹7,100 in interest, for a total value of over ₹1,07 lakh.
Please note that investment in PPF is monthly or annual basis for a minimum of 15 years. The above calculation is illustrative of how much returns an additional investment of your bonus to your PPF could generate (exclusive of the total PPF investment and returns).
Disclaimer: This story is for educational purposes only. We advise investors to check with certified experts before making any investment decisions.
