CAQM17 min ago
PPF vs SIP Comparison: Which investment creates higher corpus in 15 years with Rs 77,777/year?
- Written by Priya Vishwakarma
Published: Zee Business| Updated: Zee Business
SIP vs PPF Comparison: Systematic Investment Plan, commonly known as SIP among investors, is a mutual fund investment option that is linked to the stock market. It allows people to invest a fixed amount at regular intervals and generate a higher corpus in the long term. Another long-term investment option that is popular in the market is PPF, which is called Public Provident Fund. It is a government-backed scheme where investors can invest their money on a yearly basis and get stable returns. Yes, both are long-term investment options, but they differ from each other in various aspects such as maximum and minimum investment amounts, maturity period, etc.
(Disclaimer: Our calculations are projections and not investment advice. Do your due diligence or consult an expert for financial planning.)
1/12
SIP: Key Features
1/12Market-linked investment Returns are not fixed and can fluctuate People can invest as little as Rs 500 per month. No maximum investment limit. No lock-in period Risk level is higher.
2/12
PPF: Key Features
2/12Offers guaranteed returns Considered a safe investment Minimum investment amount is Rs 500/year Maximum investment amount is Rs 1.5 lakh/year.
3/12
SIP vs PPF: Comparing both the investment options
3/12Investment amount: Rs 77,777 per year Time: 15 years In this write-up, we will compare both investment options by investing Rs 77,777 per year for 15 years separately to see which option will give higher returns.
4/12
PPF Vs SIP: What rate of return are we using for the calculation?
4/12Since PPF is a government scheme, it offers a fixed interest rate of 7.1 per cent. For SIP calculations, we are assuming an annual return rate of 12 per cent in all calculations.
5/12
SIP investment with Rs 77,777/year: How much money do one need to invest every month?
5/12If a person invests Rs 77,777 annually, it means he/she is investing approximately Rs 6,481 each month. Therefore, according to the calculations, the total investment over 15 years would be approximately Rs 11,66,580.
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SIP investment with Rs 77,777/year: How much capital gain can be earned after 15 years?
6/12In 15 years, one can get approximately Rs 19,17,931 in terms of capital gain.
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SIP investment of Rs 77,777 annually: Total money earned after 15 years in SIP
7/12The total corpus generated at the end of 15 years would be approximately Rs 30,84,511.
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SIP investment calculations (with 12% annual interest rate):
8/12Monthly investment: Rs 6,481 Total investment (15 years): Rs 11,66,580 Estimated returns: Rs 19,17,931 Total value: Rs 30,84,511
9/12
PPF investment of Rs 77,777 annually: Total amount to be invested in 15 years
9/12As per the calculations, if you invest Rs 77,777 annually for 15 years, the total investment will be around Rs 11,66,655 (almost the same as you are investing in SIP above).
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PPF investment of Rs 77,777 annually: How much interest will be earned after 15 years?
10/12An interest of Rs 9,42,766 will be earned in 15 years.
11/12
PPF investment of Rs 77,777 annually: How much money can one get after 15 years in PPF?
11/12The final corpus generated at the end of 15 years will be Rs 21,09,421.
12/12
PPF investment calculations (with 7.1% annual interest rate):
12/12Annual Investment: Rs 77,777 Total Investment (15 years): Rs 11,66,655 Estimated Returns: Rs 9,42,766 Total Corpus: Rs 21,09,421
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