SIP vs PPF: By planning strategically and understanding the power of investing, anyone can build a financially stable future. Whether you start with smaller amounts over a longer period or make larger contributions over a shorter term, the key is consistency. If you’re looking for solid investment options, you may consider Public Provident Funds (PPF) or Systematic Investment Plans (SIPs).
SIP vs PPF: Key Features
| SIP | PPF |
| Market-linked investment plan | Government-backed savings scheme |
| Fixed monthly contributions | Can invest up to Rs 1.5 lakh per year |
| Can invest monthly, quarterly, or annually based on your financial capacity | Maturity period is 15 years |
| Average long-term return is around 12% | Offers an interest rate of 7.1% per annum |
Can you guess how much corpus you will have after 15 years in both investments if you invest Rs 60,000 per year? Let’s find out.
SIP Investment Calculation: How much corpus will you generate in 15 years with Rs 60,000 annual investment?
If you invest Rs 60,000 per year (Rs 5,000 per month), your total investment over 15 years will amount to Rs 9,00,000. Assuming an average annual return of 12 per cent, your corpus at the end of 15 years would be approximately Rs 25,22,880, including Rs 16,22,880 as capital gains.
PPF Investment Calculation: How much will corpus you generate in 15 years with Rs 1,20,000 annual investment?
If you invest Rs 60,000 per year in a PPF, your total investment over 15 years will also be Rs 9,00,000. However, with an annualised return of 7.1 per cent, the interest earned would amount to Rs 7,27,284. The final corpus would grow to around Rs 16,27,284 (the sum of both the principal and the interest).
Investment Summary (Figures in Rupees)
| Investment Type | Total Investment (15 years) | Capital Gain | Final Corpus |
| SIP | 9,00,000 | 16,22,880 | 25,22,880 |
| PPF | 9,00,000 | 7,27,284 | 16,27,284 |
SIP Investment Summary –
PPF Investment Summary –
Key Considerations:
– SIPs are market-linked, meaning returns are not guaranteed. The 12 per cent return mentioned above is an estimate, and actual returns may vary depending on market conditions.
– PPF offers guaranteed returns, but the interest rate is fixed and lower than that of SIPs.
(Disclaimer: Our calculations are projections and not investment advice. Do your due diligence or consult an expert for financial planning)
