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SIP vs PPF: Where can you get higher corpus on Rs 1,10,500 annual investment over 15 years?
- Written by Shriti Aniraj
Published: Zee Business| Updated: Zee Business
Systematic Investment Plan (SIP) and Public Provident Fund (PPF) are two widely used investment avenues offering different risk-return profiles. SIP involves periodic investments in mutual funds, benefiting from compounding and market-linked returns. PPF, a government-backed savings scheme, provides fixed, tax-free returns with long-term security. If you invest Rs 1,10,500 annually, which option builds a larger corpus over 15 years? Let’s compare their returns, risk factors, and benefits.
(Disclaimer: This is an not investment advice. Do your own due diligence or consult an expert for financial planning)
1/10
What is SIP (Systematic Investment Plan)?
1/10SIP is a disciplined investment method in mutual funds, where a fixed amount is invested regularly. It allows investors to build wealth over time through smaller, periodic contributions rather than a lump-sum investment.
2/10
How SIP works?
2/10
Amounts are automatically debited and invested in selected mutual funds.
Units are allocated based on the mutual fund’s NAV at the time.
Compounding ensures returns grow exponentially as investments accumulate over time.
3/10
When to invest in SIP
3/10SIP can be started anytime. Earlier investments maximize returns, making it ideal for those aiming for long-term financial goals.
4/10
SIP returns on Rs 1,10,500 annual investment
4/10
Invested Amount: Rs 16,56,000 (for 15 years)
Estimated Return: Rs 27,22,569
Total Value: Rs 43,78,569
5/10
What is PPF (Public Provident Fund)?
5/10PPF is a government-backed savings scheme offering tax-free returns. It combines safety, long-term growth, and tax benefits under Section 80C.
6/10
Key features of PPF
6/10
Interest Rate: 7.1% annually (compounded yearly)
Investment Limits: Rs 500 minimum; Rs 1,50,000 maximum annually.
Maturity: 15 years (with extension options in blocks of 5 years).
7/10
Loan and withdrawal provisions in PPF
7/10
Loans available after the first year and before the 6th year.
Partial withdrawals permitted after the 5th year, capped at 50% of the balance from specific years.
8/10
PPF returns on Rs 1,10,500 annual investment
8/10
Invested Amount: Rs 16,57,500 (for 15 years)
Estimated Return: Rs 13,39,414
Total Value: Rs 29,96,914
9/10
SIP vs. PPF: Which builds larger corpus?
9/10
SIP yields a higher total corpus of Rs 43,78,569, outperforming PPF’s Rs 29,96,914.
SIP offers flexibility and higher potential returns, while PPF ensures stability and risk-free growth.
10/10
SIP vs PPF: Which one to choose?
10/10
SIP is suitable for risk-tolerant investors seeking higher returns.
PPF is ideal for risk-averse individuals prioritising safety and tax-free growth.
Combining both can diversify your portfolio and balance growth with stability.
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