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SIP vs PPF with Rs 1,45,000/year investment: Which can generate a higher corpus in 15, 25, and 35 years?
- Written by Anamika Singh
Published: Zee Business| Updated: Zee Business
Let's compare SIP and PPF as investment options, considering a yearly investment of Rs 1,45,000 for 15, 25, and 35 years. SIP is a market-linked investment; these investments don't offer a guaranteed return. Instead, their performance is directly influenced by the fluctuations of the chosen market. However, they may hold potential for higher returns, while PPF provides secure, guaranteed returns. We will evaluate which option can generate a higher corpus over 15, 25, and 35 years, taking into account the potential returns between these two popular investment choices in India.
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1/9
What is Systematic Investment Plan (SIP)?
1/9A Systematic Investment Plan (SIP) allows you to invest in mutual funds by contributing a fixed amount at regular intervals.
2/9
What is PPF?
2/9The Public Provident Fund (PPF) is a government-backed savings scheme designed for long-term financial goals. With a tenure of 15 years, extendable in blocks of five years, PPF ensures safety and offers attractive interest rates.
3/9
Interest rate in PPF
3/9Currently Public Provident Fund is offering an interest rate of 7.1 per cent per annum.
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PPF calculation conditions: Rs 1,45,000/year investment for 15, 25, and 35 years
4/9Yearly investment: Rs 1,45,000 (monthly investment Rs 12,083x 12 months) Time period: 15, 25, and 35 years Rate of interest: 7.1 per cent
5/9
PPF: What will be your retirement corpus in 15, 25, and 35 years with Rs 1,45,000/year investment?
5/9On a Rs 1,45,000/year investment, the retirement corpus in 15, 25, and 35 years will be as follows: In 15 years: Estimated maturity amount - Rs 39,32,602, estimated total interest - Rs 17,57,602. In 25 years: Estimated maturity amount - Rs 99,64,414, estimated total interest - Rs 17,57,602. In 35 years: Estimated maturity amount - Rs 2,19,41,262, estimated total interest - Rs 1,68,66,262.
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SIP investment conditions
6/9Since there are no fixed returns in SIP investment, we are calculating as per annualised returns of 8 per cent (debt fund), 10 per cent (equity fund), and 12 per cent (hybrid fund). We're also assuming a monthly investment of Rs 12,083(1,45,000/12).
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SIP: What you can get on Rs 12,083 monthly investment for 15, 25, and 35 years (hybrid fund)
7/9At 12 per cent annualised growth, the estimated corpus in 15 years can be Rs 57,50,679, and estimated capital gains can be Rs 35,75,739. In 25 years, the estimated corpus can be Rs 2,05,67,762, and the estimated capital gains 1,69,42,862. In 35 years, the estimated corpus can be Rs 6,65,87,372, and the estimated capital gains 6,15,12,512.
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SIP: What you can get on Rs 12,083 monthly investment for a 10% annualised return (equity fund)
8/9At 10 per cent annualised growth, the estimated corpus in 15 years will be Rs 48,52,789. The estimated capital gains will be Rs 26,77,849. In 25 years, the estimated corpus can be Rs 1,50,21,098, and the estimated capital gains 1,13,96,198. In 35 years, the estimated corpus can be Rs 4,13,95,071, and the estimated capital gains 3,63,20,211.
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SIP: What you can get on Rs 12,083 monthly investment at 8% annualised return (debt fund)
9/9At 8 per cent annualised growth, the estimated corpus in 15 years will be Rs 41,05,543. The estimated capital gains will be Rs 19,30,603. In 25 years, the estimated corpus can be Rs 1,10,54,005, and the estimated capital gains 74,29,105. In 35 years, the estimated corpus can be Rs 2,60,55,212, and the estimated capital gains 2,09,80,352.
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