SIP vs PPF for Rs 1,35,000/year investment: Which can create higher corpus in 15 years?

SIP vs PPF: For those who are looking for long-term investment options, Systematic Investment Plans (SIPs) and Public Provident Funds (PPFs) may be beneficial. Both differ in nature but help investors accumulate a substantial corpus in the long term. But which one is ideal for your financial goals? Let's find out, with an example, which option gives higher returns on an annual investment of Rs 1,35,000.

What is an SIP?

SIP in mutual funds is an investment option that is linked to the stock market.

Key Features 

- One can invest money as low as Rs 500.
- Average long-term return offered by SIP is 12% 
- People can invest monthly, quarterly, yearly based on their capacity

What is a PPF?

PPF or Public Provident Fund is a government scheme that offers tax benifits.

Key Features 

- One can invest up to Rs 1.5 lakh in a year
- Interest rate offered by PPF is 7.1% 
- Maturity period is 15 years

SIP vs PPF: How Much Corpus You Can Generate in 15 Years?

Suppose, you are investing Rs 1,35,000 annually in both - SIP and PPF for 15 years. Now, can you guess how much corpus you can generate in these years? Find out here.

SIP Investment Calculation: How Much Corpus Will You Generate in 15 Years with Rs 1,35,000 Annually?

If you invest Rs 1,35,000 yearly in SIP (Rs 11,250 per month), your total investment will amount to Rs 20,25,000 in 15 years. Assuming an average annual return of 12 per cent, the total corpus generated at the end of 15 years would be approximately Rs 56,76,480, including Rs 36,51,480 as capital gains.

SIP Returns (with 12% annual interest rate):

Monthly investment: Rs 11,250
Total investment (15 years): Rs 20,25,000
Estimated returns: Rs 36,51,480
Total value: Rs 56,76,480

PPF Investment Calculation: How Much Will Your Corpus Grow in 15 Years with Rs 1,35,000 Annually?

If you invest Rs 1,35,000 per year in a PPF, your total investment over 15 years will also amount to Rs 20,25,000. However, with an annualised return of 7.1 per cent, the interest earned would be Rs 16,36,388. With this, the final corpus would be around Rs 36,61,388 (principal + interest).

PPF Returns (with 7.1% annual interest rate):

Annual Investment: Rs 1,35,000
Total Investment (15 years): Rs 20,25,000
Estimated Returns: Rs 16,36,388
Total Corpus: Rs 36,61,388

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