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SIP vs PPF with Rs 99,900/year investment: Which can create higher corpus in 15 years?
- Written by ZeeBiz WebTeam
Published: Zee Business| Updated: Zee Business
SIP vs PPF Comparison: When it comes to investing for long-term financial planning, there are several investment choices available in the market including safe, fixed return schemes and market-linked options. Two of the popular options are – Systematic Investment Plans (SIPs) in mutual funds and Public Provident Fund (PPF). Both help investors build wealth over time but are differ in terms of returns, risk and structure. To understand which option can generate a higher corpus, let us compare SIP and PPF assuming an investment of Rs 8,325 per month, or Rs 99,900 per year, over a 15-year period.
SIP: Systematic Investment Plan is a market-linked investment option, so its returns are not fixed and can fluctuate. However, for the calculations, we assume a 12 per cent annual rate of return.
PPF: Public Provident Fund is a government-backed scheme, so their returns are fixed. Currently, it offers an interest rate of 7.1 per cent.
(Disclaimer: Our calculations are projections and not investment advice. Do your due diligence or consult an expert for financial planning.)
1/9
SIP vs PPF: Comparision
1/9SIP is flexible, convenient and cost-effective, while also offering tax benefits, the power of compound interest and rupee cost averaging. While PPF is a flexible, accessible, government-backed security, which is transferable and offers loan and withdrawal facilities.
2/9
Maximum investment limit
2/9There is no maximum investment limit in SIP mutual funds. However, the maximum investment amount in PPF is Rs 1.5 lakh per year.
3/9
Minimum investment limit
3/9People can start investing in SIP with just Rs 500 per month. Meanwhile, the minimum investment amount in PPF is Rs 500 per financial year.
4/9
SIP investment for 15 years: If Rs 8,325 is invested every month, what will be the total investment?
4/9As per the calculations, if you invest approximately Rs 8,325 every month or Rs 99,900 annually for 15 years, the total investment will be around Rs 14,98,500.
5/9
SIP investment for 15 years: How much capital gain can be earned? How much money can I get?
5/9The estimated capital gain would be approximately Rs 24,63,629. The total amount earned at the end of 15 years would be approximately Rs 39,62,129.
6/9
SIP investment calculations (with 12% annual interest rate):
6/9Monthly investment: Rs 8,325 Total investment (15 years): Rs 14,98,500 Estimated returns: Rs 24,63,629 Total value: Rs 39,62,129
7/9
PPF investment for 15 years: Total amount to be invested in 15 years
7/9As per the calculations, if you invest Rs 99,900 annually for 15 years, the total investment will be around Rs 14,98,500 (same as you are investing in SIP above).
8/9
PPF investment for 15 years: How much interest will be earned? How much money can I get?
8/9The interest earned will be Rs 12,10,927. The final amount received at the end of 15 years will be Rs 27,09,427.
9/9
PPF investment calculations (with 7.1% annual interest rate):
9/9Annual Investment: Rs 99,900 Total Investment (15 years): Rs 14,98,500 Estimated Returns: Rs 12,10,927 Total Corpus: Rs 27,09,427
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