Delhi Schools7 min ago
PPF vs SIP with Rs 1,50,000/year investment: Which can create larger corpus in 15 years?
- Written by Priya Vishwakarma
Published: 9:10 PM, Apr 1, 2025
|Updated: 11:36 PM, Apr 2, 2025
PPF vs SIP: Systematic Investment Plan (SIP) and Public Provident Fund (PPF) are two long-term investment options that help to generate a substantial corpus for future needs. Both are different from each other. In this write-up, we will learn more about them and compare their return for an investment of Rs 1,50,000 per year over 15 years.
(Disclaimer: Our calculations are projections and not investment advice. Do your due diligence or consult an expert for financial planning.)
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What is an SIP?
SIP is an investment option that allows investors to invest a fixed amount in mutual funds at regular intervals (usually every month).
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Flexibility in investment
The interval can be monthly, quarterly, or yearly.
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Average Return
SIP offers an average long-term return of 12 per cent.
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What is PPF?
Public Provident Fund or PPF is a long-term investment scheme in which one can invest annually and get stable returns.
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Maturity Period in PPF
Its maturity period is 15 years.
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Maximum Investment in PPF
In PPF, one can invest a maximum of Rs 1.5 lakh/year.
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PPF Interest Rate
PPF offers a fixed interest rate of 7.1 per cent.
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SIP vs PPF: How Much Corpus Can You Generate in 15 Years?
Let's assume you are investing Rs 1,50,000 per year in SIP and PPF separately. Now, can you guess which investment option can generate a larger corpus in 15 years? Let's calculate and find.
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SIP Investment Calculation For Rs 1,50,000 Annual Investment: How Much Corpus Can You Generate in 15 Years?
If you invest Rs 1,50,000 yearly in SIP (Rs 12,500 per month), then your total investment will amount to Rs 22,50,000 in 15 years, as per the calculations. Assuming an average annual return of 12 per cent, the capital gains earned would be Rs 36,99,142. Adding the two, the total corpus generated at the end of 15 years would be approximately Rs 59,49,142.
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SIP Returns (with 12% annual interest rate):
Monthly investment: Rs 12,500 Total investment (15 years): Rs 22,50,000 Estimated returns: Rs 36,99,142 Total value: Rs 59,49,142
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PPF Investment Calculation For Rs 1,50,000 Annual Investment: How Much Corpus Can You Generate in 15 Years?
In a PPF, if you invest Rs 1,50,000 per year, then your total investment will amount to Rs 22,50,000 in 15 years. However, with an annualised return of 7.1 per cent, the interest earned would be Rs 18,18,209. With this, the final corpus will be around Rs 40,68,209 (principal + interest).
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PPF Returns (with 7.1% annual interest rate):
Annual Investment: Rs 1,50,000 Total Investment (15 years): Rs 22,50,000 Estimated Returns: Rs 18,18,209 Total Corpus: Rs 40,68,209
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