Compared to Public Provident Funds, SIPs carry a higher level of risk as they are linked to the equity market performance but there are chances that SIP can perform well in comparison to PPF. On the other hand, the Public Provident Fund is a very safe investment that highlights guaranteed returns and is backed by the government. One of the main advantages of a Systematic investment plan is that they do not have a lock-in period. You are free to stop the investment at any time but PPF investments come with a lock-in period of 15 years, following the term of investment. Therefore, let’s find out which scheme can create a higher retirement corpus of Rs 1,50,000/per year investment for 35 years. 

What is SIP?

A Systematic Investment Plan (SIP) is an investment scheme that allows you to invest a fixed amount regularly. 

What is PPF?

PPF (Public Provident Fund) is a long-term savings scheme backed by the government of India. It is a safe investment option that offers guaranteed returns with tax benefits.

Tax benefits in PPF

Investments, interest earned, and withdrawals are tax-free under Section 80C.

What is current interest rate in PPF?

As of February 2025, the Public Provident Fund (PPF) in India offers an interest rate of 7.1% per annum, compounded annually. This rate has remained unchanged since April 2020.

What is minimum investment amount to start SIP?

The minimum amount to invest in an SIP is Rs 100. One can also increase, decrease, or stop their SIP.

What is minimum investment in PPF?

The minimum deposit in a financial year is 500, whereas the maximum is Rs 1.5 lakh.

How does SIP work?

When you invest in a SIP, a fixed amount of money is automatically taken from your bank account at regular intervals (like every month). This money is then invested in a mutual fund, and you receive units based on the fund’s current value (NAV).

How does PPF work?

This scheme, run by post offices and banks, offers voluntary contributions to its account holders. Post Office offers a 7.1 per cent interest rate compounded yearly.

PPF calculation conditions

• Yearly investment: Rs 1,50,000 (monthly investment Rs 12,500x 12 months)
• Time period: 35 years
• Rate of interest: 7.1 per cent 

PPF: What will be your retirement corpus in 35 years with Rs 1,50,000/year investment?

On Rs 1,50,000/year contribution, the estimated retirement corpus in 35 years will be Rs 2,26,97,857. 

SIP calculation conditions

Since SIP investments don’t have fixed returns, we’re using estimated annual returns of 8 per cent for debt funds, 10 per cent for equity funds, and 12 per cent for hybrid funds. We’re also assuming a monthly investment of Rs 12,500(1,50,000/12)

SIP: Retirement corpus on Rs 12,500 monthly investment for 35 years (hybrid fund)

At 12 per cent annualised return, the estimated corpus in 35 years will be Rs 6,88,85,389. During that time, the invested amount will be Rs 52,50,000, and capital gains will be Rs 6,36,35,389.

SIP: Retirement corpus on Rs 12,500 investment for 35 years (equity fund)

At 10 per cent annualised return, the estimated corpus in 35 years will be Rs 4,28,23,668. The estimated capital gains will be Rs 3,75,73,668.

SIP: Retirement corpus on Rs 12,500 investment for 35 years (debt fund)

At 8 per cent annualised return, the estimated corpus in 35 years will be Rs 2,69,54,411. The estimated capital gains will be Rs 2,17,04,411. 

(Disclaimer: Our calculations are projections and not investment advice. Do your due diligence or consult an expert for financial planning)