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:

Assuming lumpsum investment in an SIP for a period of five years, at 12% interest p.a. you will generate returns as follows:

• ₹20,000 is expected to return ₹15,246.83 in interest, for a total payout value of ₹35,246.83.
• ₹50,000 is expected to return ₹38,117.08 in interest, for a total payout value of ₹88,117.08.
• ₹80,000 is expected to return ₹60,987.33 in interest, for a total payout value of over ₹1.40 lakh.
• ₹1 lakh is expected to return ₹76,234.17 in interest, for a total payout value of over ₹1.76 lakh.

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:

• ₹20,000 is expected to return ₹4,091 in interest, for a total payout value of ₹24,091.
• ₹50,000 is expected to return ₹10,227.51 in interest, for a total payout value of ₹60,227.51.
• ₹80,000 is expected to return ₹16,364.01 in interest, for a total payout value of ₹96,364.01.
• ₹1 lakh is expected to return ₹20,455.01 in interest, for a total payout value of over ₹1.20 lakh.

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:

• ₹20,000 is expected to return ₹8,712.59 in interest, for a total payout value of ₹28,712.59.
• ₹50,000 is expected to return ₹21,781.47 in interest, for a total payout value of ₹71,781.47.
• ₹80,000 is expected to return ₹34,850.35 in interest, for a total payout value of over ₹1.14 lakh.
• ₹1 lakh is expected to return ₹43,562.93 in interest, for a total payout value of over ₹1.43 lakh.

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).

Jocelyn Fernandes is a journalist and editor with nearly 13 years of experience covering the business, corporate, economy and markets beats in news.<br> As chief content producer for around three years at Livemint (Hindustan Times), Jocelyn publishes breaking stories, explainers, features and live blogs on a range of business and economy topics, including the Budget, corporate developments, stock markets, income tax, money and personal finance, cryptocurrency, government policy, impact of US tariffs, international developments and more.<br> Jocelyn's writing philosophy is focused on delivering news in an accurate and accessible format for readers. She thus focuses her news coverage on explainers and FAQs in order to breakdown business, corporate, economic, and policy topics that are of importance to everyday readers.<br> She holds a Bachelors in Mass Media (BMM) and Post Graduate Diploma (PGD) in Journalism and Communication and has previously written for online business and markets news site Moneycontrol (Network18), Business-to-business (B2B) trade publications — the industry magazines Power Today and Solar Today (ASAPP Media), and the national news agency United News of India (UNI).<br> Outside of work, Jocelyn keeps up-to-date with local and international news, enjoys reading fiction books, novels and short stories, and enjoys movies, travelling and art. <br> She can be found on X and LinkedIn, and reached by email: <a href="jocelyn.fernandes@htdigital.in">jocelyn.fernandes@htdigital.in</a> <br> X/ Twitter handle: <a href="https://x.com/scribeJocelyn">@scribeJocelyn</a> <br> LinkedIn: <a href="https://in.linkedin.com/in/jocelyn-fernandes-journalist">LinkedIn</a>

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