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SIP vs PPF for 15 Years: Which can create higher corpus on Rs 1,30,000/year investment?
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SIP vs PPF for 15 Years: Which can create higher corpus on Rs 1,30,000/year investment?


SIP vs PPF: For individuals who can afford to invest a fixed amount consistently over a longer period, Public Provident Funds (PPF) and Systematic Investment Plans (SIPs) can be excellent opportunities to accumulate wealth. While both are popular long-term investment options, one is a government-backed savings scheme, and the other is a market-linked investment plan. But which one aligns best with your financial goals and capacity? What are their annual return rates? Which option can provide a higher return on an annual investment of Rs 1,30,000? In this article, we will explain and compare both options through calculations.

PPF – A government-backed savings scheme

SIP – A market-linked investment plan 

SIP vs PPF: Basic Differences

SIP

PPF
Can invest depending on financial capacity Can invest up to Rs 1.5 lakh per year
Flexibility to invest monthly, quarterly, or annual basis Maturity period is 15 years
Average long-term return is around 12% Offers interest rate of 7.1% percent per annum

Can you guess how much corpus you will have after 15 years in both investments if you invest Rs 1,30,000 annually? Let’s find out.

SIP Investment Calculation: How much corpus will you generate in 15 years with Rs 1,30,000 annual investment?

If you invest Rs 1,30,000 per year ( Rs 10,833.33 per month), your total investment over 15 years will amount to Rs 19,49,940. Assuming an average annual return of 12 per cent, your corpus at the end of 15 years would be approximately Rs 54,66,072, including Rs 35,16,132 as capital gains.

PPF Investment Calculation: How much will corpus you generate in 15 years with Rs 80,000 annual investment?

If you invest Rs 1,30,000 per year in a PPF, your total investment over 15 years will also be Rs 19,50,000. However, with an annualised return of 7.1 per cent, the interest earned would amount to Rs 15,75,781. The final corpus would grow to around Rs 35,25,781 (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 19,50,000 (approx) 35,16,132 54,66,072
PPF 19,50,000 15,75,781 35,25,781

SIP Investment Summary –

Year SIP Amt /
Month		 Total Invested
Amt		 Interest Amt /
Year		 Maturity
Value
Year1 10,833 1,29,996 8,767 1,38,763
Year2 10,833 2,59,992 35,134 2,95,126
Year3 10,833 3,89,988 81,330 4,71,318
Year4 10,833 5,19,984 1,49,873 6,69,857
Year5 10,833 6,49,980 2,43,595 8,93,575
Year6 10,833 7,79,976 3,65,690 11,45,666
Year7 10,833 9,09,972 5,19,756 14,29,728
Year8 10,833 10,39,968 7,09,849 17,49,817
Year9 10,833 11,69,964 9,40,537 21,10,501
Year10 10,833 12,99,960 12,16,969 25,16,929
Year11 10,833 14,29,956 15,44,946 29,74,902
Year12 10,833 15,59,952 19,31,006 34,90,958
Year13 10,833 16,89,948 23,82,514 40,72,462
Year14 10,833 18,19,944 29,07,772 47,27,716
Year15 10,833 19,49,940 35,16,132 54,66,072

PPF Investment Summary –

Year of deposit Amount deposited Interest earned Year-end Balance
1 year Rs 1,30,000 Rs 9,230 Rs 1,39,230
2 years Rs 2,60,000 Rs 28,346 Rs 2,88,346
3 years Rs 3,90,000 Rs 58,048 Rs 4,48,048
4 years Rs 5,20,000 Rs 99,090 Rs 6,19,090
5 years Rs 6,50,000 Rs 1,52,275 Rs 8,02,275
6 years Rs 7,80,000 Rs 2,18,467 Rs 9,98,467
7 years Rs 9,10,000 Rs 2,98,588 Rs 12,08,588
8 years Rs 10,40,000 Rs 3,93,627 Rs 14,33,627
9 years Rs 11,70,000 Rs 5,04,645 Rs 16,74,645
10 years Rs 13,00,000 Rs 6,32,775 Rs 19,32,775
11 years Rs 14,30,000 Rs 7,79,232 Rs 22,09,232
12 years Rs 15,60,000 Rs 9,45,317 Rs 25,05,317
13 years Rs 16,90,000 Rs 11,32,424 Rs 28,22,424
14 years Rs 18,20,000 Rs 13,42,047 Rs 31,62,047
15 years Rs 19,50,000 Rs 15,75,782 Rs 35,25,782

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.





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